How Apollo Is Building the Insurance Layer for Autonomous Vehicles

Welcome to Autonomy Insiders, the show where global industry leaders in autonomous driving unpack their real-world insights.

Today with Chris Moore facing autonomous vehicles. So it doesn't fit in any of our traditional silos and I'm not going to ram it into a silo that wasn't built for autonomy. Autonomy is such a big enough opportunity and big enough exposure that it deserves its own solution. Autonomy is is the biggest insurance opportunity that exists today.

What I love about autonomous vehicles from from a risk perspective is in any form of collision, they're going to have a huge amount of insight into what caused and what happened in that in that moment. You know, they got so many sensors and technology and and cameras, so you can easily ascertain if they're at fault or not at fault. And that means we can make a speedy resolution on on a claim.

I think if we don't do the change in the UK and Europe, then potentially run the risk of falling behind in this AV world. We we want to create something that that captures all the risks of autonomy. We want one simple policy that caters for all the different potential outcomes of a collision.

Welcome back to Autonomy Insiders. I'm your host, Daniel, and today we're diving into a topic that sits at the intersection of two industries that are about to collide in a big way. Autonomous vehicles and insurance. You can build the safest self-driving car in the world, but if you can't ensure it, it doesn't go on the road. So, insured is not a back office function in the AV space. It's a prerequisite for deployment. And right now the insurance industry is trying to figure out how to price, underwrite, and also cover a technology that breaks almost every assumption traditional auto insurance was built on. And my guest today is someone who has spent over a decade building insurance products for the digital economy and in recent years has also become one of the leading voices on how to ensure autonomous vehicles. I have Christopher. He's the president of Apollo Ibot, the specialist insurance division operating as Lloyd's syndicate 1971 focused entirely on the sharing economy, new mobility and emerging technology and most recently Apollo but also announced the autonomous vehicle insurance program and we will get into details of the program but first we want to understand the bigger picture. So Chris welcome to the show and so happy to have you on today.

>> Yeah, thank you for having me Dan. So Chris to start for for some of our audience um maybe Apollo and also Lloyds of London might not be familiar territory. Can you give us the 60-second version of what Apollo does and where Ibots fits in?

>> Yeah. So Apollo Ibot is a syndicate under the Apollo group. Um and there's multiple syndicates of Lloyds and we all trade off our own capital but Lloyds is the overarching sort of governance structure that sits above all of us. Now, Apollo, quite a cool um origin story. We had the name Apollo because one of our original investors when we set up the Sydney in 2011 was actually Neil Armstrong um the first man on the moon. And one of the reasons he wanted to to get involved in insurance was because he wanted insurance to be this sort of vehicle for innovation, this enabler rather than this blocker. So, I feel quite proud to still be at Apollo and working on things like autonomous vehicles. And I think if if Neil was still with us today, I think he'd be proud that Apollo are sponsoring, you know, frontier technology for for the mobility space.

>> Yeah, that's super helpful context. And now IBOT stands for ensuring businesses of tomorrow today.

>> And as you mentioned, I find the origin story fascinating and it also predates the the current AV hype cycle by nearly a decade. So take us back to 2014. a sharing economy platform comes to you needing a product that doesn't exist. What was the moment you realized that traditional insurance couldn't serve these new business models?

>> Yeah, it was a a kind of an eye-opening moment for me about how insurance is its own worst enemy sometimes just in the way that we've built the industry, the cultures that we fostered. We tend to put thing we tend to put people and companies into silos and they're the silos that we've created. If you are property risk, you go to our property division. You know, you're at your boats and your yachts, you go into our marine division, your cars, you go into our motor or auto division. And we separate them really nicely by our product. When you had this growth in technology and this this transition culturally away from assets to experiences and usage, which is what the sharing economy is all about, it created a huge challenge for insurance silos. And so you had digital better breakfasts and ride share companies and micromobility companies entering into the insurance market and they just didn't fit into a silo. And so you you take like um an Airbnb example which um has a huge play now in insurance. Insurance is very important for their business. But when when that sort of company entered the insurance market, you had certain property insurers say well you don't own property and that's how our product works. You can't buy property insurance. And then you'd have liability insurers saying, "Well, this doesn't feel like you're owning the the sort of liability of someone else. Where's the insurable interest?" Because isn't the liability set with the host or the user? And it was it was really difficult. And so what it opened our eyes to was we have to create a new solution for these new tech and sharing economy companies. And once we had started partnering with a few of the big players in that space, it turns out Silicon Valley is a lot smaller than I envisioned. and word of mouth spread and said, you know, Apollo are open to creating new innovative solutions for for these types of risks. It wasn't until 2015 2016 that we first saw our first autonomous vehicle. And as you can imagine, that was in the early stages of testing. But it was something that once we had built a new program for these these different sharing economy verticals, building a program that was fit for purpose and specific to autonomy was kind of no-brainer for us. And it was already our our aspirations were racing about what this could mean for the future. And it's really nice that we're now seeing the the sort of large scale commercialization. Um I wish it would have come sooner because we were waiting and ready for it because we had the products and the insurance appetite for it but it's now a really exciting space because for me autonomy is is the biggest insurance opportunity that exists today.

Let's start directly with the fundamental question. Do autonomous vehicles need a fundamentally different insurance product or can they be insured under more or less the same framework that exists for human driving vehicles today?

I think it absolutely needs a different product. Um, and it needs it because of the way that the existing traditional insurance products operate. I often get asked the question, and it's the wrong question, but this is the question I get asked, is where will the insurance for an autonomous vehicle sit? And really, it's normally an insurance-based question, and they'll say, well, it's got wheels and it looks like a motor vehicle. So, is it in an auto insurance or is it a motor insurance product? And then I struggle with that because I say well those policies are built for accidents. Uh, you know if you are in an accident this you know we will pay for that loss. Well an autonomous vehicle if you want to be really penicity doesn't really have an accident. It's going to make a cognitive decision. It may have a collision but you wouldn't necessarily call it an accident because you could argue it was intentional. It was designed to do this in that sort of scenario. So that product has its flaws. So then you start thinking, okay, is it a general liability or a products liability product? Well, it could be, but most people that do products liability, this is a very different risk. And their products and their wordings and their models and the way they rate products liability risks, which is typically off revenue, not off mileage, doesn't really work for a moving vehicle. And then you finally could have the argument that well, it's a tech and digital risk, so shouldn't it sit under the cyber liability policies? Again, cyber liability isn't priced for the most part with third party bodily injury and property damage in mind. And that's the biggest risk I suppose facing autonomous vehicles. So, it doesn't fit in any of our traditional silos. And I'm not going to ram it into a silo that was built wasn't built for autonomy. Autonomy is such a big enough opportunity, a big enough exposure that it deserves its own solution. And so that's what we've been passionate about in all our interactions with autonomous vehicle companies and providing them with insurance solution is we want to provide insurance solution that works for your risk. So we think it doesn't matter what the traditional policies of old are, we want to create an autonomous vehicle liability solution and give that to you and make sure that if there is something that happens and and you're at fault and you're liable, you know, that promise that you've given to us to uh to to to help you and to pay in that situation, we want to honor that promise.

And how do you price autonomous vehicles when there's so little developed claims data? Traditional autoinsurers rest on decades of human driving history, so to speak, across billions of miles. And with AVs, that foundation doesn't exist right now.

>> Yeah, it's it's one of the biggest challenges. often the sort of sentence that I I chuckle about and when I speak to lots of tech companies is you know insurance companies you're like driving the car looking in the rearview mirror and all you're looking at is your like 10 years of loss data and without that you can't do anything and and that's kind of been the challenge us with autonomous vehicles the way we look at it is if we think something can you know scale and they can and grow and really embrace a partnership then I'm willing to go into something with a bit of uncertainty maybe a bit more uncertainty than I'm used to, a bit more volatility. There's absolutely benchmarks and proxies and things that we can look at to to ascertain what we think are rough estimate for prices. Will we be right? No, of course we won't. It may be we've charged too much or we've charged too little. But as long as I've got the right partner on the other side of the trade, then we can correct that over time. And that's where we have a really different client engagement model at Apollo than what a lot of um other insurers um are used to. insurance still works in 12 month cycles. So if you do your home insurance, your car insurance, your company's corporate insurance, you're probably insuring it every 12 months and and that's it's not normally the nicest customer experience. And so you only really speak to insurers every 12 months. We're probably speaking to our clients every week, every month, you know, certainly every quarter because we want that exchange of of information. We want to keep looking at this data on a really dynamic basis to keep correcting our pricing because we don't have that 10 years of develop loss data. But it's evolved over time. And whilst if you break down the the pricing of autonomous vehicle risk, you're looking at the frequency of accidents element. And then you look at the severity of accidents, we can see pretty quickly the frequency of collisions. You know, we can see per 100 million miles or per million miles, per thousand miles, how many times an autonomous vehicle collides with with a foreign object versus what we know from a human driver. So we can get that frequency view. It's a severity view that is somewhat uncertain and we keep refining that assumption over time in partnership with our clients. You don't have to have the perfect recipe at the start. We know that we can build it as we progress and autonomy does more and more miles and gives more and more credibility to the loss performance.

>> Yeah, maybe talking about this frequency versus severity um theme. So I think crash frequency should drop dramatically with AVs, but maybe the severity per incident may increase because you have all these sensors that would cost more to replace and also maybe these nuclear verdicts against those technology companies could also be something that tore up anything we've seen in traditional autos. So how do you model that frequency severity inversion so so to speak?

>> Yeah, I I think the frequency is relatively easy for us to model. The severity, like I said, is the difficulty. You've absolutely referenced one element of that is the cost of these vehicles being drastically more than the cost in a human-driven vehicle. Those costs are coming down every year and that's and that's the challenge and it will depend on the layers of tech stack you have on the vehicles. There are some companies that that have a much lower cost vehicle but don't have as much tech redundancy. So like camera technology only versus camera lineer radar. But then if you look at the actual bodily injury piece I think that is the most uncertain unfortunately in a US setting what we're up against is the US legal system. If you think about, you know, we know that it's true, whether you call it social inflation, um whether you call it legal system abuse, reptilian theory, nuclear verdicts, thermonuclear verdicts, there is some really really unfortunate proceedings that happen amongst certain plaintist lawyers that try to get these humongous verdicts within trucking and and and just personal car accidents or incidents involving ride share companies. And and we've seen that. I mean, you don't need to be immune to it. If you're ever in the United States, whether it's on your television or you're driving down the motorway, you can't help but see billboards with plaintiff lawyers saying, "Have you been an accident? Please call me." Um, it's a hugely lucrative business because of these these verdicts. And so, if you read some of the big reports, you Whimo have done amazing reports with Swiss that they make public available. Um, and you can see some of the frequency reduction statistics that they are are releasing and they vary and they're obviously updating all the time as they do much more miles. But if we assume that the frequency of accidents from an autonomous vehicle versus a human-driven vehicle is is a 90% reduction or something in that region, what the plaintiff's lawyers are feeling is I have 10% of the chances that I used to have of getting of even having an opportunity to get one of these nuclear verdicts. So the plaintist bar is so against autonomous vehicles, you know, they're going to ignore the amount and the millions of lives that the technology will save. What they're looking at is you're ruining my lucrative business of getting these these huge wards. And so what I think will happen is if ever there is incidents with an autonomous vehicle, the plaintiff's lawyer will go and throw everything that they absolutely have at that case to drive and fearonger and scare and punish one of these AV companies purely because of the economic effect it will have on their business. And that's where you could see the severity of loss, not necessarily the severity of injury, but the severity of loss within the legal system being that much higher. And that's probably the uncertainty and volatility that we take on our balance sheet as an insurer. And that's really the the protection that we're giving uh our AV partners.

>> Yeah, makes sense. And I think many insurers al also simply don't participate in the AV space at all. And maybe this is also one reason because of that uncertainty. So maybe also uh a question to you. So what makes Apollo so different? Why is IBOT leading the AV insurance space when so many other insurers are sitting on the sidelines?

>> It's a great question and I I'm not so egotistical to think it's it's it's all about us. You know, we've asked that question to ourselves. Why aren't more insurers more active in the space? And I think that could be one of two things. Yes, it could be they're worried about the unknown, the volatility, and the potential for loss. But that's what we're here for. If you're scared of paying losses, then we really shouldn't be in the insurance industry. And and and for me, I I I don't think that is the reason. I think the reason ultimately is um either market conditions or how you are built as your business. Right. So Apollo I told you was was built in 2011. Actually built in 2009, but kind of launched our first thing in 2011. For for as as insurance goes, that's a really young company. You know, Lloyds has been around more than 325 years. lots of insurance companies about there been been out there for for over a hundred years. They have grown this empire this humongous portfolio of business and so there's not probably the same incentive or the same hunger for them to grow into a new vertical because they can say well if I can just continue doing the stuff that I've done for so long and I know it so well and there's such a low standard deviation about around my performance I can consistently deliver great returns to my shareholders. what's the incentive for me to go down the unknown? And there is a little bit of that. You've also got some companies, a large portion of their portfolio, their empire is is human-driven vehicles. So, you also have the the adine sort of conflict of saying, why would I support this technology that's about to disrupt all the premium that I get on human-driven vehicles of which I know so well and have made so many profits for so many years. So, they're probably sitting on the fence and saying, "I'm not going to accelerate the the cannibalism of another side of my business." And and then there's others that I truly think are a little bit fearful of just the the cultural impact of of autonomy. And I've tried to ask myself why people are so scared of this because I know I'm a really bad driver. And I've been in the car with lots of my friends who I would also say are pretty bad drivers. I've been in autonomous vehicles and felt incredibly safe. much safer than I would in some of my friends vehicles. But there is that emotive relationship with with driving a car. And I think people put it down to independence. You know, when I was when I turned 17 in the UK, the first thing I did was do the driving lessons because I immediately wanted to be able to drive because I associate with driving with freedom. I could go wherever I like. I have my independence. I think some people in my generation are thinking you're going to take my independence away with autonomy. So some people say this is 30 years away, 50 years away. It's never going to happen because I'm always going to drive because it's my independence. I truly don't believe that. And so, you know, as a purely selfish point of view, I'm glad that there's not much, you know, insurance interest, but I think it's because people don't realize how disruptive it's going to be and how quick the timeline could shift.

>> Yeah, makes a lot of sense. And when an autonomous vehicle insured by Apollo is involved in an accident, say a pedestrian collision or something like that, what actually happens on the claim side? So, who gets the call first? And how does fault attribution work when you're dealing with software and not a human driver?

>> It's a great question. We spend a lot of time with our clients way before we we insure them. And then when we insure them, we're very um we're very clear that we we view it as a partnership. And in that partnership, we're giving you a promise um to pay a loss if it happens. But what we want you to do is control and minimize and mitigate any form of loss you can. So if my if ever one of my insurers got an accident and and my risk manager's phoning me to say, "Hey, we've had an accident." I'll be like, "You need to hang up the phone. Don't worry about the insurance. We're here to, you know, to to to pay and indemnify. What I want you to do now is focus on controlling the situation and doing the best possible thing in your time of need. We will give you any support that you need in that, but you don't need to worry about informing us. You know what I mean? In in any claim, what I love about autonomous vehicles from from a risk perspective is in any form of collision, they're going to have a huge amount of insight into what caused and what happened in that in that moment. you know, they got so many sensors and technology and and cameras, so you can easily ascertain if they're at fault or not at fault. And that means we can make a speedy resolution on a on a claim. Uh, and we can deal with it in a manner that we know what happened. In auto and motor claims that have gone before, quite often we don't know what's happened and then there's a lot of pointing fingers. Um, and then claims can drag over years to ascertain who's at fault and what the what the quantum of those damages are. In autonomous vehicles, you have the ability to to be really dynamic on the claim side. And that's where we lean quite heavily into saying to our clients, in that claim side, we're going to rely so much more on you because you have all this technology and all this information. And what we're seeing with the, you know, big ride share platforms and with big autonomous vehicle companies is they understand that and are actually investing quite heavily in their own risk and insurance teams. So, they've got employed risk professionals that are claims experts. So when it happens, they are handling a claim as good if not better than what we could do from our perspective and and we absolutely accept that and love that. That's part of the partnership.

>> It's super interesting. And maybe now let's uh talk about a specific program >> that you brought to life. So on March 12th, you Marsh and Uber announced the autonomous vehicle insurance program. >> Um and you've just explained why AVs need a different insurance approach. Um and how did that thinking then translate into an actual product?

>> Yeah. So what Uber realized um and at I thought the press release um summarized it really really well. What they realized is they're not there is still not today a uniform approach to how insurance solutions should look like for AV. Certainly Apollo have a view and other insurers I'm sure have a view other brokers have a view. But Uber essentially said, well, there's a lot of confusion and when some of these, you know, newer AV companies are developing, one of the one of the big challenges is finding the right insurance and knowing what insurance is right, knowing what the right price is, what the different coverages are and how that works. And Uber in their history have always taken a very active involvement in insurance for human drivers on their platform. They have a a very sophisticated insurance team. They have a very sophisticated captive and so as they enter into this um building an autonomous ecosystem on the Uber platform, they wanted to build an insurance solution that complements and supports that ecosystem. And so they wanted a very very clear coverage. And so they built a specific um proprietary coverage that that embeds all of the different coverages that any AV partner and themselves would have on the deployment on the platform. And then they've also made it um you know built a pricing model they think is viable for all these companies and it is almost like an added service for those companies if you like because if all those companies were buying insurance independently you don't get economies of scale and some of them don't have the sophistication the buying power of an Uber and so effectively what I think they've built is a fitforpurpose insurance solution that will help grow the amount of ABS on their platform and if we believe the statistics which I of course do from a frequency cease perspective and I believe that the severity will be controlled and lowered over time then ultimately what they're doing is making their platform safer safer for me safer for you and everyone who uses the platform and so I applaud the innovation the approach they've done and yeah very proud to be a small part of that journey

>> yeah and maybe you could also walk us uh through the structure a bit more so the AVIP is described as a single master policy covering all key participants so maybe who exactly is covered and what does all key participant means then in practice

>> if we go back to the claim scenario what's really difficult whilst you have all the cameras and all the technology in a human scenario if if we got into an accident it's pretty easy in most cases to determine whether it was my fault or whether it was your fault and then the insurance then works pretty easily. When you look at an in an autonomous vehicle, there are lots of different players to make up the ecosystem. You've got um the ride share platform potentially. Um you've got then the AV software. Then you've got the OEM that provided the vehicle. The OEM might have another partnership that has some tech built into that that OEM to enable AV. Then you've got all the third tier suppliers where it's the brakes or whether it's the you know the um the engine itself or or whatever it is. So you've got lots of different parties in that AB ecosystem. If there was a claim, the scenario becomes really difficult because you could have all those different parties have all different insurance programs and they're all pointing fingers at each other saying, "Well, it's your insurance program that needs to respond." No, it's your insurance program needs to respond. They're all buying insurance for essentially the same risk and it makes the process even worse. And so the concept is let's ensure all of those parties under one to make it super simple. So, we're not pointing fingers. If there is a collision, this insurers put on pay. It makes it seamless, cost- effective and and and and just yeah, it it makes those partnerships come together and and it creates less friction because all those partners know exactly what happens when there's a claim. And it's so good to figure that out, you know, before there is ever a claim than to start trying to figure out a solution afterwards. So, that's the concept of bringing everyone together in one simplistic policy.

>> Yeah, that makes a lot of sense. in the announcement also says multiple markets around the world but where is AVM IP live right now is it this US only program today

>> yeah so I can't go into the specifics of all the things but obviously there's been announcements for the US there's been announcements for the UK and then you've got future announcements across Asia and Europe as well all of that is super exciting Apollo and as same as every Lloyd syndicate has global licenses um we all control those global licenses out of my team my team is dedicated to mobility And I think that's the real exciting part of ensuring new mobility in general, but especially autonomous vehicles. Well, I, you know, if I was a buyer, say I'm a an autonomous vehicle company, and I've gone to the US and I buy my insurance from what is it, insurance 101, and I've got a great relationship. We spent time to get to know each other. They understand my technology. Um, we've had a load of engagement. Great. If I then go to another territory and say, "Hey, insurance 101. I'd like to buy in this territory." Oh, we only do one. We don't insure in that territory. It's really difficult. I don't think any tech company or any AV company, any mobility company wants a different partnership in every different country in the world. I mean, you know, some of these some of these platforms are in 180 plus countries. If they can create one solution, then obviously that has a huge amount of benefit. It takes away a lot of uncertainty. It's a lot simpler from a resource perspective. So I think part of the attraction to to partnering with Apollo and partner with Lloyds is our global licenses. Um so we're excited about the new announcements that will come but yeah certainly some big ones already sort of um been announced in the UK and the US

>> and AV regulation also vary enormously from region to region and you mentioned that also you have US but also for sure other regions and does the European regulation make it easier or harder to underwrite here in Europe?

>> It's a great question. Yeah. So, as much as everyone talks about the US insurance market is so difficult because the US court system, I actually find it easier to ensure autonomy in the United States because it's super clear and the limit requirements are super manageable. In the UK and Europe and a lot of territories, you have to provide unlimited liability for motor. It's a real consumer protection type item, but it does impede a lot of insurers in providing those those types of limits. And you also have really strict motor regulations and motor laws. And so the policy wordings don't permit any amendments and and and anything of that nature. So you almost have to ensure an autonomous vehicle using a human insurance construct. And some of that is really difficult. And so what we have to do is try and create wraparound or policies that sit alongside the traditional regulatory policy to make sure there's no gaps in coverage. That's really difficult and really inefficient for us. And it means you've got sometimes one, two, three different insurance policies trying to ensure the same thing. And it's purely because the regulation doesn't permit a an AV insurance solution. We we were trying to build that and that's part of our job is speaking to the regulators about look here the complexities of this of the solution here. But you know when you look at the UK those regulations are kind of etched into stone. they're they're very old regulations and and and it's very hard to to change them. Um obviously in the US you're looking at regulations that done on a state level. Um, so it's slightly easier to get change, but I think if we don't do the change in the UK and Europe, then potentially run the risk of falling behind in this Davy world. And you know, from for me, if when I experienced Whimo, right? So my wife has never been in a Whimo, but whenever I get into a Whimo, it's it's a really lovely experience. And even if the waiting time is is longer or even if the the cost of which is is higher, you know, I I would probably do that. Um, and I think people are really looking forward to when when that sort of technology comes to the UK. Certainly my wife said something to me um recently and I can remember um when we were talking about the growth and I said oh I I came back from one of my trips and and she asked how many times do you use an autonomous vehicle I said actually not too many times. Every time I was trying to do it was like twice the waiting time. Um and my wife said but it was late at night. And I said, "Yeah, it was late tonight." And she said, "Well, I would have waited, you know, four times the wait time because I'd have felt so much safer in in an autonomous vehicle than than in a typical ride share." And sometimes obviously my why my white male privilege. I don't think and think like that. And you see why, you know, way more open with their ridership and it's really heavily women. So there are huge other additional benefits that come with the technology and I think the UK and EU will start from a public perspective really craving that technology once they've experienced it elsewhere in the world. And so I hope that pushes the regulators in the right direction to say come on we've got to do something and create the opportunities for things like insurance and and everything that goes with it to be economically viable that they can launch and be a big part of our mobility system.

>> Yeah, absolutely agree. And the this whole AVIP construct um sounds complex.

>> Yeah.

>> From first conversation to launch, how long did it take to structure this AVIP? And also what were the maybe the hardest negotiation points?

>> Several months, but I think you know whilst insurance isn't the most dynamic industry in the world, I think it's the best things take time to build. And I think there was a lot of people that had a lot of back and forth. And what I really loved about that construct was there were three key parties in ourselves, the platformer and the broker in Marsh. And everyone added a huge amount to it. And I think if any one of those parties tried to do it themselves, then I don't think the product would have been as robust and and as good as what the outcome was. So it was it was a lot of back and forth. You know, you have to look at legal you have to bring in legal and compliance when you look at a new wording that's never been done before. You have to test the construct to make sure it works. lots of approval processes, but I think what what has been built is a foundation. It's in its early days, right? It's just it's just launched, but I think that could serve as as the sort of the solution that sort of empowers autonomy at scale. And if that's what ends up happening, then then all those months of our work will be absolutely worth it.

>> And you you just brought up Mars. So maybe for our listeners who aren't familiar with how Lloyds works, so can you explain who does what in this program? What is Mars role? What is Apollo Ibot's role and where does one end and the other begin?

>> Yeah, great question. So Apollo, think of Apollo as the risk taker. Um, so in the event of a claim, it's Apollo that that pays for those claims and in exchange for that promise to pay those claims, we generate premium for for that. So we build pricing models that talk about what that premium is and it's kind of our wording that dictates which claims we pay and which claims we we're not liable to pay. What a broker like Marsh does is is they are sort of working on behalf of the client to access the the right insurance and negotiate on the client's behalf the pricing and the coverage. So Marsh being you know the biggest global insurance broker in the world have a huge amount of IP and knowledge in in every corner of the planet. And so if you're looking for a global platform you know they're they're kind of an obvious people to to be considered and they've also been equally involved in autonomy like a like Apollo for over a decade. um they've worked with so many of different um AB partners. So they they have a team that is absolutely dedicated and specialized in in autonomy. Um so you know it was no surprise that they were selected as the broker partner for this program and you know for for um for a lot of it you know a lot of what that program looks like would would be Marsh's input. So they are the broker, the intermediary if you like between us and the buyer and then we are we are the risk taker and the people that pay the claims.

>> And you also mentioned already the the Swiss and Whimo study that they published in December um 2024 covered like 25 million autonomous miles and it found an 88% reduction in property damage claims and also 92% reduction in bodly injury claims compared to the human driven vehicles. So from an underwriting perspective, how much weight do you put on that kind of data when when pricing the AV risk?

>> We actually put a lot of uh weight on the data. So we um we have great relationships with both way and officially both fantastic companies. And what I I have a lot of admiration for for Whimo in putting that information into the public domain. I think one of the major major issues facing autonomy is trust and and sometimes you have to think to yourself you know whimo to launch their autonomous vehicle in robo taxi you know it's it's not too unlike thinking NASA we we think we should go to Pluto before we go to the moon like there's there's easier AV deployments you know you could put them in mining settings agriculture and you'll see and you could see more of that but they've chosen to put it in a really difficult operating domain you know driving autonomous vehicles around San Francisco isn't easy with the topography and and the road network of San Francisco. But I think the some of the the the rationale behind doing that is autonomy is never going to scale unless people trust it. And I think the best the best way to get people to trust this technology is put them in the back of the vehicle and see firsthand how safe you feel, how the driver is really really um relatively assertive and and and very confident of doing what what you're asking it to do. I think that is a is a big thing and releasing those statistics adds further help. It helps with regulators. It certainly is bringing more insurance capacity to the table which which will be needed over time. So yeah, we have we have definitely relied on those statistics and I think there's a lot of credibility in those statistics, but I do think it's a great thing that they're releasing them.

>> And maybe let's also talk about uh a risk that is also often brought up. It's software versioning risk. So when an AV company pushes an overthe-air update that changes the driving behavior across its entire fleet, the driver has fundamentally changed overnight more or less. And from an AV insurance perspective, does that trigger then a re uh underwriting event or how do you ensure the fact that the insured risk is software?

>> Yeah, I think it's it's a great great point and and it's why philosophically I really enjoy ensuring autonomy. If I ensure a typical traditional human-driven risk, it's the the relationship between the risk and the miles driven or or the time is is very linear. If the statistic are you have an accident every so miles, then the more miles you do, the more likely you are to have an accident, right? And and like I say, it's linear. It's not a linear relationship between autonomy because every mile driven, the next mile is slightly safer. It's slightly better because it's learned from the previous mile. And so effectively what you're getting is every mile done I'm getting a better risk. And so the argument is my rate should always be coming down. Now there is elements that work against this right there are certain things that we can discover and maybe there is a type of incident or a type of accident or a type of maneuver that we haven't seen before and and the AB doesn't perform as expected in which case you're not necessarily upping your rate because the performance got worse. you're basically amending the base assumption and and maybe that happens, but with every 100 million miles that that happens or 50 million miles and it you don't get one of those scenarios, you can't help but lean into this is a hugely safe part of the operations. I sometimes struggle when you know I'll be at a dinner party and someone say I would never get one of these because I just wouldn't trust it and I've obviously seen all this data and saying the data is re is incredibly compelling. you really should trust it. And and I I'd go to thought now I have three children uh eight, six, and four. I would happily have my kids uh in in in an autonomous vehicle. I'd very much I'd be very happy with that.

>> And maybe one last question about the Uber AVAP before we zoom out again. So BU, we ride, pony, and also Momento are all Uber AV partners. And um just wanted to ask if AVIP can also cover Chinese developed AV technology operating in the US or European markets or does the geopolitical dimension complicate underwriting somehow?

>> Yeah, for for me what we have agreed is to support um with this sort of unique insurance solution any AV partner that um Uber decide to partner with in the US. So we we're not necessarily rising. We've we have agreed to ensure an ecosystem rather than individually agree certain partners. So the partnership selection is entirely on the platform partner. So we're not involved in those conversations. So yeah, I'm sure that they are considered at different levels, but but it's never entered into something that we're considering. We have we've we've signed up to support autonomy at scale like I say. So it's not we want to ensure this type of AV risk versus and we don't want to ensure this type of AV risk. And I do think that that's probably the biggest challenge in front of us is is creating risk assessment frameworks and ways that we can see the difference in how all the different AVs will perform. It's you know way more have done more miles than so many of of anyone on the planet. And so you have to put Whimo at a level of that is something that has huge amounts of credibility when you're insuring that account because they've got a huge amount of data that you can rely on. that doesn't exist for a lot of other partners. They will get there, but what we want to do is partner on the AV ecosystem and and like you were saying in the absence of claim data, we want to support the ecosystem and then I'm sure that we will refine our pricing, our rating, our risk assessment over time. But for for now, we have signed up to ensure an ecosystem and that was a major major point that we wanted to make.

>> Makes sense. And I think Uber is not the only um yeah AV partner that you uh insure. Can you say a bit more about other projects that you al also insure and give some context there as well?

>> Yeah, we we we ensure you know there's more the list of aven companies that we ensure is a lot longer than the list of AV companies we don't insure and that's partly because of you know the amount of insurance capacity available or the amount of insurance uh companies that are interested in ensuring autonomous operations. you know, I think the the constructs are slightly different in terms of the distribution model. And I think you're kind of seeing almost like three different um insurance constructs or or maybe AV partnerships. So, you've got like um you've got the we are AD software, then you could be we are the OEM. Uh and then you've got we are the like the transportation or the mobility app. So, if you're Tesla, you've got all three. So Tesla, you know, we've got we build the software within our robo taxi and we're going to have our own mobility app. That is a completely different uh distribution insurance model, partnership model that exists there. Then you've got the sort of Whimo. We do the software, but we're going to partner with Lorm and we've got our own app. It's a slightly different construct because the OEM is slightly different. So their insurance solution is going to look slightly different. And then you've got this we're going to be a platform that we have the app but then the OEM potentially and the AV software come through to us. So that's more akin to that Uber sort of scenario. So you've almost got three different insurance products for all those three different constructs. And then when they obviously in different regions of the world they're going to look slightly different again. So there's lots of different approaches and that's not to mention when we start having an autonomous drones and autonomous agriculture and autonomous mining equipment. all of those will look slightly different as well. So, lots of different ways to approach it and I think um we approach everyone on their own merits. We're not betting on which one of those models is the best and which one of those is going to be successful. I think one of the other really interesting topics is that autonomous personal versus commercial. Um and I think that's going to that that conversation is happening a lot more frequent. We're being asked to have those discussions. So would I own a vehicle that has an autonomous capability, but I only switch it on for a certain period of time. So you've got the level two plus autonomy is in eyes on hands off versus eyes off and hands off and would you own and not a level four autonomous vehicle depending on the price? Maybe it seems like a luxury ownership, but you're looking at those those scenarios and and those type of models and and they look very different. And a lot of the um OEMs that are looking into that space are talking about, you know, subscription models. And if they're talking about

Subscription models, what you could see is like an embedded insurance model. So, as part of your subscription, you get insurance. It'll be really interesting to see how it works when you're driving versus when the vehicle's driving itself because the two policies need to be completely different. Like you need an AV policy and a human policy and then where's the price point? Does it make it you know it could be that autonomous vehicles become so safe and the pricing gets so low? You might be in your car say I could either drive myself but that's going to be super expensive because the insurance or I'll let it drive for me. And then the question is why do you still need the capability to drive yourself? So it's going to be super fascinating and insurance will play a play a big part in it.

I just find it fascinating. But I won't say the name of the company but I was speaking to somebody and uh their CEO was was talking and and they showed what they thought the split of autonomous miles would be between personal autonomy and commercial autonomy. And I think they had it at like 50% 50/50. I saw a schedule said, "Do you believe 50/50?" I mean, I'd have said it'd be so much more commercial than personal. Like personal seems like a really luxury uh position when it's fully, you know, when we have level four autonomy uh uh you know, all over the planet. And what the person that was presenting said, "Look, all all of us in a room had different opinions and we were all sort of arguing with each other." And our CEO just said, "If we're just going to talk about opinions, let's go with mine and we'll move on." And I was thinking, "Well, okay." So nobody knows the answer of what it's going to be. So we may as well look at supporting all the verticals and then whichever vertical wins, we've got a solution. We've got a we've got a play in that from a insurance perspective.

>> Yeah. And and you you talked already about different verticals that you also have in autonomy like agriculture, mining and so on. And one big vertical is also autonomous on-road trucking. And are you also already playing in this field because there's also a lot of activities going on in the US uh with autonomous trucking and also maybe is it completely different than autonomous right hail or what are the difference between autonomous trucking and autonomous right hailing?

>> Yeah, we we we ensure several of the the major autonomous trucking companies. Um I think that's a super fascinating space. um insurance for you know human trucking is can um it can put a a company out of business. It's such a hugely important cost on the balance sheet and so lowering that cost for for logistics and uh companies are absolutely absolutely massive. It's a huge disruptor. I think it's been a slower roll out partly because of the cost and the size and you have to get specific routes signed off at state level and so you almost have like a hub and spoke system where it can be autonomous for a certain period of the journey but then it's got to be human driven for the for the second part and I think those routes and and the scope is expanding all the time and if you think about the the operating domain it must be easier for an autonomous vehicle to drive straight down a a major highway than operating sitting on the inner city streets of LA or San Francisco. So I absolutely believe in autonomous trucking. I think that's another big important part of the work that we do and we partner with people there in a similar vein that we do in in um in AV transportation or AV rideshare. I I think that's a um a really really fascinating part. I I know a funny story of um I I can't remember if it was an insurance broker or an insurance underwriter that maybe hadn't done as much knowledge as they as they should have on the company and they asked a big am trucking company if they could ride along on one of the journeys. Um and what they didn't realize was that the actual journey journey was six hours long. So they had to go six hours in one direction to wait and have to come six hours the way back. I'm sure they learned a lot, but if you build an autonomous vehicle, you you you pretty much get trust it in seconds, maybe minutes. Probably doesn't need six hours. I think that space is super interesting and and absolutely will be the future.

>> Yeah. So, it was a a good road trip for him.

>> I hope they had fun. So maybe another point that you already brought up is also cyber risk and the level 4 AV contains hundreds of millions of lines of code and a fleetwide software exploit or something like this could theoretically disable or misdirect thousands of vehicles simultaneously and does does the insurance also cover those cyber related incidents or would that be then a separate kind of policy?

Now our policy um in encapsulates third-party liability arising out of cyber. We we want to create something that that captures all the risks of autonomy. We want one simple policy that caters for all the different potential outcomes of a collision. And so that was really key for us is making sure that third-party cyber risks were covered. So yeah, that's been covered under our policy for for many years. Um to be honest, we have not seen losses arising out of cyber attacks. I think a lot of people think about cyber and maybe watch too many movies, but they'll think about every single robo taxi all of a sudden driving at 100 miles per hour and and and and all turning left or driving off a cliff. In reality, once once these vehicles leave the s and and and are operating, you can only really theoretically if you even could, you can only actually aim a cyber attack at one particular vehicle. You can't hack all the vehicles at any one point. And I'm not I'm not a tech person, but what I'm told is that's theoretically impossible. So some of the systemic loss scenarios, they're almost science fiction and belong in science fiction. Well, a reality, but yes, if there was a cyber-related incident, it caused third-party bodily injury, that would be covered under an Apollo policy.

>> So So it's like a really all-in-one package for

>> Exactly.

>> for IV companies. We don't want we don't want our insureds um you know sat or phone like I said in that earlier example I don't want one of my clients phoning me and asking me we've had this is it covered because we've failed in the whole partnership process then they should know we've created a policy that covers everything that you're worried about and if there's something they don't want coverage for we've had that conversation they've accepted that that risk sits on their balance sheet but for the for the most part we want to make sure comprehensively the risks that they face are covered by our policy.

And I read a a projection from from Goldman Sachs about insurance costs that that said the per mile cost will drop to more than 50% or something like this over the next years and you also said that it gets cheaper and cheaper. So if those projections hold is the AV insurance market then bigger or smaller than the human driving market so to speak that it replaces and you also mentioned that it's somehow maybe a fear of other insurers.

Yeah, it'll undoubtedly be smaller now. And that and that's why I was saying there's a lot of insurers that are probably not looking at this space because they know that the let's call it wheels-based insurance because that captures commercial that captures personal if if you know if the size of the personal um and and commercial wheels-based insurance combined is is sort of this much I think you're talking about autonomy going down to this much like it will be a fraction of the size of the of the premium but that's because the risk will be a fraction of the Now, obviously, insurance companies invest premiums and larger premiums and and and and make that money work and do other things with it. And there will be other liabilities that come from AI that I'm sure we need to create new solutions for, but ultimately, yeah, the autonomous vehicle insurance will be much smaller. Now, is that a concern for me? No, because I don't have a huge presence in the personal lines motor space. So, I hope to have a large segment of that autonomous vehicle insurance market. But yes, it's going to be drastically smaller than the motor auto insurance market today.

>> Makes sense. And and maybe one last question for today.

>> Sure.

>> If you could change one thing about how the insurance industry is approaching autonomous vehicles right now, what would it be?

That's a great question. Um, I don't trust and leaning into a new and emerging risk. Um, I think it is hugely disruptive. So I understand the it can be quite scary because of the potential impact it can have not just on insurance but in the world how we live our lives how we get around but ultimately this is going to save so many people's lives and insurance cannot be a hindrance to that so for me it's more insurers need to trust this more insurers need to join the conversation at some point because of the legal system in the US we're going to need lots more capacity much more capacity than Apollo going to be able to deploy on their and and I welcome any insurers to say, "Hey, we're not in this space, but we'd love to discuss if we can join and and and potentially support some of your clients." I think eventually it will it will be so disruptive to every industry we know. So, if you're writing marine insurance, there's going to be autonomous boats and that is going to affect your market. There's going to be autonomous construction. There's going to be autonomous mining, agriculture, we've already talked about. So, every single insurance vertical we know today is about to be disrupted. So, if you're not part of the conversation, my my urge would be insurance needs to be. And I get a question a lot as well, and I'll probably end on this. I get asked, who's your biggest competitor? And a lot of people are expecting me to name another insurance company. My biggest competitor is my client. And what I mean by that is if I don't create a solution that is fit for purpose both from a coverage and a price perspective and I don't take into account how safe they are quick enough so I don't give them the price that that the consumer risk deserves. Some of these companies with huge balance sheets in their own right can create their own insurance company and we've already seen a quite a big player in this space have their own insurance. It hasn't performed very well but they have their own insurance company. I do not want my clients to build our insurance company. I want them to buy insurance from us. But if we don't provide the right product, then they could insource insurance and that is is scary for me.

>> Yeah, super insightful. And Chris, thanks again for for taking the time today. It was a very insightful conversation and I have been wanting um this conversation for a while. Uh because insurance is one of those topics that most people in the AV industry treat as a as a checkpoint more or less. But as you've made it clear today, it's far more than that.

>> So it's a structural enabler more or less a structural barrier depending on whether the industry gets it right.

>> Yeah. Well, thank you for having me. I hope I've shed some light on on how we're trying to tackle the problems and what certain major players are doing. I know there were a load of questions um about certain certain insurance programs, but hopefully that cleared a lot of it up today.

>> Absolutely. So, thanks again, Chris, for all the insights and until next time.

>> Yeah, thank you very