The Mayor’s Office and the World Economic Forum are collaborating on the project
Get ready – Self-driving vehicles are coming to the streets of Boston.
This month, the Office of Mayor Marty Walsh has announced the selection of Boston as a lead city partner in the World Economic Forum’s City Challenge initiative. The City Challenge is an effort aimed at helping cities better prepare for the future of urban mobility and autonomous technologies.
“Boston’s collaboration with the World Economic Forum represents our commitment to creating a safe, reliable and equitable mobility plan for Boston’s residents. We are focused on the future of our city and how we safely move people around while providing them with reliable mobility choices,” said Mayor Walsh. “With our start-ups and educational institutions, Boston is a leader in technology, robotics and innovation. Together with our partners, we know the City of Boston is ready to lead the charge on this transformative technology.”
In particular, the year-long program will include creating policy recommendations as well as conducting testing of autonomous or self-driving vehicles throughout the city. Aiding in the initiative will be the World Economic Forum’s knowledge partner, The Boston Consulting Group. Together these parties will work towards developing a testing framework along with a viable strategy for the incorporation of autonomous vehicles within urban city centers, such as Boston.
Why Boston was selected…
According to the World Economic Forum, Boston’s innovative nature and its focus on the future were two of the driving forces behind its selection.
“Boston distinguished itself in the application process with its strong appetite and track record in civic innovation and some very thoughtful questions about the intersection of vehicle automation and shared mobility,” said John Moavenzadeh, Head of Mobility Industries at the World Economic Forum. “Our advisory board, which is a cross-industry group of public and private sector experts, overwhelmingly felt that Boston provided the best opportunity for learning and advancement of new models of mobility. ”
The rise of autonomous vehicles
The Boston Consulting Group says the rise of autonomous vehicles could provide many benefits to society, including dramatically increasing road safety and drastically reducing road fatalities by up to 90%
“Shared, autonomous vehicles have the potential to fundamentally improve urban transportation by enhancing accessibility for the city’s residents and increasing road safety. We are excited to be engaging with the City of Boston during the coming months on making this vision for urban mobility a reality,” said Nikolaus Lang, Senior Partner at The Boston Consulting Group.
In addition to fundamentally changing how we drive, however, autonomous vehicles also will fundamentally change how we insure our vehicles. While many agents may not believe that driverless cars are coming, most experts have concluded that by 2030 autonomous vehicles will be part of our everyday driving experience.
What this means, is that whether insurance agents like it not, changes will be coming to an area that has traditionally been the bread and butter for many agencies.
The Insurance Information Institute, for example, published an article this past July entitled “Self Driving Cars and Insurance.” According to the Institute, self-driving cars could affect the insurance industry in the following areas:
- Regulation. Currently insurance is state regulated. The III argues, however, that with the rise of driverless cars, the discrepancy between No-Fault and Tort-based liability systems may become more acute. As a result, the auto insurance system may become more uniform with the Federal Government playing a more participatory role in this area.
- Underwriting. The III argues that while many of the factors used in underwriting will continue to apply with self-driving vehicles, the make, model and brand of the car may take on greater significance. Telematics will likely also grow in importance during the transitional years from traditional to self-driving cars.
- Liability. Like regulation, the issue of liability will evolve as liability will not focus on the driver of a vehicle, but rather the manufacturer of the car, for example.
- Repair Costs. With the rise of “smart cars”, so will rise the cost of repairing them says the III. As a result, while there may be less accidents that the insurance industry will have to deal with, the costs of repairing damaged parts from autonomous vehicles will likely be high.
What agents can do to start preparing
While most independent agents will not be insuring self-driving vehicles any time soon, most experts admit that they are coming and sooner than most people think. With that in mind and with the prospect of this sea change in the auto insurance industry, agents can begin to prepare for the challenge by informing themselves.
With that, here are the titles of five studies or research articles attempting to predict the consequences of self-driving vehicles and insurance:
- New Study: 15 Percent Autonomous Cars by 2030, McKinsey Autonomous Cars Report
- Insurance Disrupted: General Insurance in an connected world, Deloitte