<strong>in</strong> the front grill. But if a trip down a gravel road breaks those sensors, what cost $150 to $200 to <strong>in</strong>stall on the assembly l<strong>in</strong>e might cost 10 times that to replace. “The <strong>in</strong>surance <strong>in</strong>dustry is essentially <strong>in</strong> the bus<strong>in</strong>ess of restor<strong>in</strong>g someth<strong>in</strong>g from an un<strong>in</strong>tended loss. While auto manufacturers are certa<strong>in</strong>ly m<strong>in</strong>dful of repairability, a simple design choice that is appeal<strong>in</strong>g to the market<strong>in</strong>g people or the design folks may also hold an un<strong>in</strong>tended consequence of <strong>in</strong>creas<strong>in</strong>g the vehicle’s premium despite a near-zero collision record,” Fraker says. The large <strong>in</strong>surance companies are also cautious, especially when it comes to autonomous technology, a real revolution <strong>in</strong> the automotive world. The companies are used to hav<strong>in</strong>g tens of millions of vehicle miles traveled as a data set. For <strong>in</strong>stance, crash test data is easy to get: ram two cars together and see what happens. <strong>Driverless</strong> car technology, however, is meant to avoid such outcomes but it’s difficult to measure their effectiveness. “That’s a real issue,” Fraker says. “Insurance is really good at measur<strong>in</strong>g what happens. The <strong>in</strong>dustry is not built on measur<strong>in</strong>g what doesn’t happen.” The Solutions Faced with these problems, Fraker sees a couple of possible solutions. One, the technology will likely be embraced by smaller, more nimble <strong>in</strong>surance companies that can <strong>in</strong>novate faster than the <strong>in</strong>dustry titans. They’ll use an Internet-based claims model and be more will<strong>in</strong>g to take chances. “That’s the k<strong>in</strong>d of company that can use self-driv<strong>in</strong>g vehicles as their breakout technology,” Fraker says. “If you have a small specialty l<strong>in</strong>e <strong>in</strong>surer that can move under the radar because their bus<strong>in</strong>ess isn’t that big to beg<strong>in</strong> with, if you want to <strong>in</strong>novate and go to market, the upside with them is pace,” he says. “If you want one of the big brand names to endorse your technology, you’re go<strong>in</strong>g to grow old.” One change that could help br<strong>in</strong>g even the large companies along would be to replace the 51-state and district <strong>in</strong>surance regulatory model with a s<strong>in</strong>gle federal-level entity, maybe aimed just at sett<strong>in</strong>g <strong>in</strong>surance rates for driverless cars. Insurance companies “could save all the operational expenses to file and file and correct, by just deal<strong>in</strong>g with one entity,” he says. While the federal government is often criticized over questions of pace by some, “This is one where I believe tremendous potential ga<strong>in</strong>s could be achieved.” Fraker says. Auto companies also could pool their test data, someth<strong>in</strong>g they have been very reluctant to do. But do<strong>in</strong>g so could generate the millions of miles of data the <strong>in</strong>surance <strong>in</strong>dustry would like to see. “If we took, hypothetically, all the manufacturers and all the cars they have on the road, and add Google, we probably have 1 to 2 million miles of test data,” Fraker says. “But who’s aggregat<strong>in</strong>g it, and where is that be<strong>in</strong>g used” Even if all that is done, one big challenge still rema<strong>in</strong>s — pric<strong>in</strong>g the <strong>in</strong>surance to reflect the quality of the technology. Currently, rates change depend<strong>in</strong>g on the experience of the driver. A newly m<strong>in</strong>ted teenage driver pays much more than a 45-year-old driver, for <strong>in</strong>stance. “Here’s what’s <strong>in</strong>terest<strong>in</strong>g: Will the <strong>in</strong>surance premiums reflect an <strong>in</strong>experienced operator when the car is do<strong>in</strong>g the driv<strong>in</strong>g If that is the case, then there is a profound consumer message be<strong>in</strong>g sent about unreliability,” Fraker says. Liability lawsuits <strong>in</strong> the United States also pose a problem, he says. “No other society <strong>in</strong> the world has litigation with the lottery mentality as it is here,” Fraker says. “If we’re not careful, we are only go<strong>in</strong>g to slow it down right here at home. This could literally cost the U.S. a technological leadership position. It’s happened before. And that would be a tragedy.” Despite these hurdles, he sees autonomous driv<strong>in</strong>g become a reality, if for no other reason than the alwayswired millennial generation wants to stay connected even when <strong>in</strong> a vehicle. “Driv<strong>in</strong>g is a distraction for them. If they can’t stay connected, they are not go<strong>in</strong>g to buy a car.” It also means freedom of mobility for the elderly and disabled and other populations, someth<strong>in</strong>g that hit home for Fraker personally when his son, who is on the autism spectrum and unable to drive, showed him a Web report on driverless technology a few years ago. “He saw the first videos that The New York Times broke about self-driv<strong>in</strong>g cars” and asked his father what he thought. Fraker <strong>in</strong>stead asked his son what he thought about it. “He said, ‘it means I get to own a car someday.’ That hit me. It has driven me s<strong>in</strong>ce.” 28 MISSION CRITICAL • May 2013
12-15 August Walter E. Wash<strong>in</strong>gton Convention Center • Wash<strong>in</strong>gton, D.C. REGI NOW TER Conference from 12 - 15 August Tradeshow from 13 - 15 August 600+ Exhibit<strong>in</strong>g Companies 40+ Countries Represented 8,000+ Attendees Promot<strong>in</strong>g and Support<strong>in</strong>g Unmanned Systems and Robotics Across the Globe auvsishow.org MISSION CRITICAL • May 2013 31