© 2018 Eversheds Sutherland (US) LLP

Prepared for the Federal Advisory Committeon Insurance (FACI) Navigating an Autonomous FutureMay 10, 2018Mike NelsonPartner
Eversheds Sutherland

Meet the presenter

Mike Nelson has more than 35 years of linsurance and automotive regulatory expstate and federal levels. As automated dtechnology has begun to disrupt the insuautomotive industries, Mike has become helping clients adapt their business stratembrace artificial intelligence and Highly 

Vehicles (HAVs) and their impact on risk transfer and emerging leHis work in this area includes automotive products, insurance prarepair processes, data accumulation, storage and transfer, and thinternet’s interaction with the future of mobility. Mike owns two Lautomated vehicles; regularly attends hearings before the US SenDepartment of Transportation, the NHTSA and the FTC; and attenevents such as the Consumer Electronics Show. Mike also receivethe University of Michigan’s M-City course on Connected and AutoVehicles.

Mike NelsonPartner, Eversheds Sutherland
Eversheds Sutherland
Eversheds Sutherland

Tesla 

X

Truck
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Navigating an autonomous future

Level 2

Level 3

LeveLeve
Who’s Responsible in a Fully Driverless 

Vehicle Crash?(Based on U.S. survey responses)
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Advances in safety and technology

─ V2X Communication

• DSRC• 5G mobile communications

─ Solid-state LIDAR─ Electric vehicles

• 2018 Nissan Leaf expected 

to have a range of 150 miles and will start at $30,000

• 2019 Nissan Leaf expected to 

have a range of 230 miles

• GM – all electric by 2030

─ Hydrogen fuel cell

Level 2, Pro Pilot Assist

Photo 
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Consumer adoption and fleet adoption

End of 2017

Will reach Level 4 by 2021 – skipping Level 3

CEO expects there to be some self-driving vehicles on the road by 2021

Self-driving on the highway by 2021

Self-driving on the highway by 2020

Self-driving on the highway by 2020

2020 for autonomous cars in urban conditions; 2025 for truly driverless cars

Highway by 2020; urban driving by 2030

Nearly fully autonomous by early 2020s – cars as well as freight trucks

Fully self-driving vehicles possible by 2021 – Level 4 or Level 5 is possible

Rumored to deploy thousands of self-driving cars in 2018
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Geo fencing and ring fencing

─ Limit AVs to certain roadways─ Limit AVs to certain geographic areas─ Navya/Keolis bus – Las Vegas
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Consumer adoption and fleet adoption
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GM – cruise automationOEM – technology partnerships

─ Creation of fleet of battery-powered, self-driving 

Chevrolet Bolts

─ Ready for consumer application in “quarters, no

– GM President, Daniel Ammann
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International adoption

─ Laws and regulations drafted by foreign countrie

Where?

Asia (predominantly China)EuropeAustralia

Successful use overseas

Change in politics 

and public 

perception at home
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GM – cruise automationOEM – technology partnerships

Graph courtesy of Naviga
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OEM – technology partnerships

─ Ford – Lyft─ Fiat/Chrysler – Google/Waymo─ GM – Cruise Automation – Lyft ─ Uber – Daimler─ Mobileye – Intel─ Baidu – BlackBerry─ Uber – Volvo─ Lyft – Magna 
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Lyft – Magna OEM – technology partnerships
Eversheds Sutherland 
Eversheds Sutherland

Consumer adoption and fleet adoption
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Legal and regulatory framework

─ Federal 

• Federal legislation, House and Senate• DOT/NHTSA

• Release of revised, voluntary AV guidelines this coming summ• Seeks to eliminate “unnecessary obstacles to the developmen

integration of new technology”

• Targeting revision of the FMVSS

─ State-based laws and regulations

• 33 states had passed something

• Patchwork

• Product liability and negligence law

─ Body of law from other countries is evolving qui
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Navigating an autonomous future

Level 2

Level 3

LeveLeve

New laws and 

regulations

International 

competition Increased 

technology

Consumer 

adoption 
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Insurance

─ Enhanced analytics─ Consolidation of insurers─ New entrants─ New alliances─ New insurance models (e.g., TNC – ridesharing 

insurance)

─ InsureMyTesla (LMI)─ Care by Volvo (LMI)
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Insurance

─ ”Care by Volvo“

• Vehicle subscription model for the Volvo XC40• Starts at $600/month• Access to a 24/7 Volvo concierge• 24-month subscription• Opportunity to upgrade to a new car at 12 months• Insurance comes “baked in”• Premium Liberty Mutual insurance package• 15,000-mile allowance• Factory scheduled maintenance• Tire and wheel road hazard protection
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Transportation as a Service (TaaS)

─ Lyft/Uber─ Zoox─ Leasing model (Care by Volvo)─ Fractional ownership─ HAV shuttles─ RethinkX

• https://spectrum.ieee.org/cars-that-think/transportatio

driving/rethinkx-selfdriving-electric-cars-will-dominate2030

• TaaS will disrupt, OEM, Energy and Insurance sectors b
Eversheds Sutherland 
Eversheds Sutherland 
Eversheds Sutherland

KPMG now believes that the core business modelfor traditional automobile insurance carriers may under threat of obsolescence, with automotive manufacturers potentially becoming a viable alternative to cover driving risk. We are entering period of radical change – the ‘chaotic’ middle’ of transformation – that promises to reshape the insurance landscape.— The Chaotic Middle, KMPG White Paper, June 2017
Eversheds Sutherland 
Eversheds Sutherland

Pilot project for insurers for Level 3 and Levevehicles

Manual driving Automated drivingRisk: personal autoModel would operate as it does today, likely at reduced cost

Risk: OEMCreation of captive insurance Opportunity for reinsurance

Gove

─ F─ S

• • 

Insurer 

Insurer would handle all claims administration. To the customer, it would app

they were purchasing a single policy through an insurer.

Pilot State

Photo courtesy of myonlinemaps.com
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© 2018 Eversheds Sutherland (US) LLPAll rights reserved.

Mike NelsonPartnermikenelson@eversheds-s+1.212.389.5061