Vincent Branch, CEO of AXA XL’s Accelerate division
As autonomous vehicles start to become mainstream, it has the potential to change the very structure of the insurance industry – rather than simply how insurers manage the risk. But, according to Vincent Branch, CEO of AXA XL’s Accelerate division, insurers should see this as an opportunity to shape the future, rather than simply serve it.
The question of autonomy has been exercising insurers for some time. Handing a machine decision-making capabilities seems, on the one hand, eminently sensible given human beings’ propensity for human error – making mistakes. But, given such mistakes create the very risks the industry insurers, what might it mean for the industry if such errors are all but erased in many industries?
However, says Branch, the likelihood of machines removing all risk is small. And where some risks diminish, new ones emerge in their place. “Think about traditional motor risk. You may have accidents in cars today that will be less relevant in an autonomous scenario. But cyber or product liability and perhaps the performance of underlying components may become much more important,” he says.
AXA XL was created when AXA acquired XL Group for $15.3bn, creating the largest global P&C commercial lines insurance platform. Its in-house innovation team, Accelerate, is led by Branch; its aim is to solve the increasingly complex risks underwriters are faced with, and explore the opportunities autonomous technology and AI might present insurers in the future.
Branch will discuss just some of the ways he sees the landscape of risk changing during his upcoming presentation to Intelligent InsurTech Europe, taking place on October 15 in the heart of London’s financial centre. “I want to talk about the new solutions that AXA XL is looking to develop and the importance of bringing in external perspectives, skills and capabilities,” he says.
“It’s not just about cars,” Branch adds. “It’s about the wider mobile autonomy in industrial and commercial sectors too. Insurance needs to be part of the solution to what mobile autonomy means. I feel very strongly that insurance has the opportunity to be a real enabler for new technology.”
By enabler, Branch means to use the principles behind insurance – namely risk mitigation – to enhance mobile autonomy’s capabilities. “Insurance has typically been treated as a transaction. Embedding it in the ecosystem and in the autonomous software itself, we can look specifically at the risks the car is facing, the route it takes for example, and work with the software to proactively manage it to create the right risk environment.”
Accelerate is already involved in a number of mobile autonomy pilots to try and understand the extent of new risks and where technology could exert a positive influence. It isn’t able to do it alone, however, and Branch emphasises the ‘ecosystem’ part of mobile autonomy and the need to work closely with innovative partners.
Three partnerships in particular are forming the basis of the Branch network: Cytora, a data, analytics and AI company; Slice, which creates digital user experience and is responsible for AirBnB’s platform; and Oxbotica, which develops software for a wide range of autonomous applications, not just road cars (forklift trucks being one example).
“One example really excites me,” Branch reveals. “We have two partnerships with airport trials where we’re partnering with Oxbotica to understand how their technology might help in that environment.” Oxbotica already works with Ocado and Heathrow Airport, in the latter using its technology to make cargo-handling vehicles autonomous.
“The data is much more granular at this level. In partnership with Oxbotica, we know exactly where a vehicle is, what the weather is like and how it is performing. We have been dealing with the law of large numbers in the past. Now we’re moving more to speciality risks and there are very few historical examples where we can assess the actual cost for that. As an industry we have been using external data to supplement and enrich that understanding. It’s similar for autonomy,” Branch explains.
How vehicles perform under new technology won’t be the only change the insurance industry must prepare for. The very nature of the customer looks set to change. Branch wants the sector to consider who will own a car in the future: “It’s highly likely we will get big shifts around car ownership and who will be the main stakeholders in the insurance relationship. We have to start thinking about shaping the insurance service of the future.
“Everything we do within Accelerate starts with the customer. It’s really important that autonomy has wider benefits for society. Insurance can help drive that technological adoption, and help it be adopted in an altogether safer way,” he concludes.
Meet Vincent Branch and other insurtech influencers on October 15th in London at Intelligent InusrTECH Europe 2018. There are limited spaces available, secure your place today.
AXA XL, Vincent Branch, Autonomous vehicles, Technology, Insurance, Insurtech