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15 Hurdles to Scaling for Driverless Cars

Will the future of driverless cars rhyme with the history of the Segway? The Segway personal transporter was also predicted to revolutionize transportation. Steve Jobs gushed that cities would be redesigned around the device. John Doerr said it would be bigger than the internet. The Segway worked technically but never lived up to its backers’ outsized hopes for market impact. Instead, the Segway was relegated to narrow market niches, like ferrying security guards, warehouse workers and sightseeing tours.

One could well imagine such a fate for driverless cars (a.k.a. AVs, for autonomous vehicles). The technology could work brilliantly and yet get relegated to narrow market niches, like predefined shuttle routes and slow-moving delivery drones.  Some narrow applications, like interstate highway portions of long-haul trucking, could be extremely valuable but nowhere near the atmospheric potential imagined by many—include me, as I described, for example, in “Google’s Driverless Car Is Worth Trillions.”

For AVs to revolutionize transportation, they must reach a high level of industrialization and adoption. They must enable, as a first step, robust, relatively inexpensive Uber-like services in urban and suburban areas. (The industry is coalescing around calling these types of services “transportation as a service,” or TaaS.) In the longer term, AVs must be robust enough to allow for personal ownership and challenge the pervasiveness of personally owned, human-driven cars.

See also: Where Are Driverless Cars Taking Industry?  

This disruptive potential (and therefore enormous value) is motivating hundreds of companies around the world, including some of the biggest and wealthiest, such as Alphabet, Apple, General Motors, Ford, Toyota and SoftBank, to invest many billions of dollars into developing AVs. The work is progressing, with some companies (and regulators) believing that their AVs are “good enough” for pilot testing of commercial AV TaaS services with real customers on public roads in multiple markets, including SingaporePhoenix and Quangzhou.

Will AVs turn out to be revolutionary? What factors might cause them to go the way of the Segway—and derail the hopes (and enormous investments) of those chasing after the bigger prize?

Getting AVs to work well enough is, of course, a non-negotiable prerequisite for future success. It is absolutely necessary but far from sufficient.

In this three-part series, I look beyond the questions of technical feasibility to explore other significant hurdles to the industrialization of AVs. These hurdles fall into four categories: scaling, trust, market viability and secondary effects.

Scaling. Building and proving an AV is a big first step. Scaling it into a fleet-based TaaS business operation is an even bigger step. Here are seven giant hurdles to industrialization related to scaling:

  1. Mass production
  2. Electric charging infrastructure
  3. Mapping
  4. Fleet management and operations
  5. Customer service and experience
  6. Security
  7. Rapid localization

Trust. It is not enough for developers and manufacturers to believe their AVs are good enough for widespread use, they must convince others. To do so, they must overcome three huge hurdles.

  1. Independent verification and validation
  2. Standardization and regulation
  3. Public acceptance

Market Viability. The next three hurdles deal with whether AV-enabled business models work in the short term and the long term, both in beating the competition and other opponents.

  1. Business viability
  2. Stakeholder resistance
  3. Private ownership

See also: Suddenly, Driverless Cars Hit Bumps  

Secondary Effects. We shape our AVs, and afterward our AVs reshape us, to paraphrase Winston Churchill. There will be much to love about the successful industrialization of driverless cars. But, as always is the case with large technology change, there could be huge negative secondary effects. Several possible negative consequences are already foreseeable and raising concern. They represent significant hurdles to industrialization unless successfully anticipated and ameliorated.

  1. Congestion
  2. Job loss

I’ll sketch out these hurdles in two more parts to come.

Why Risk Management Is a Leadership Issue

From product scandals to data breaches to natural disasters, companies are dealing with constant risk. But how they prepare for those risks can make the difference between riding the roughest wave — or drowning in it. The field of risk management, once an afterthought for many companies, is getting renewed attention with a new book by two Wharton professors who want to help business leaders think more deeply about worst-case scenarios. Michael Useem, management professor and director of the Center for Leadership and Change Management, and Howard Kunreuther, professor of operations, information and decisions as well as co-director of the Risk Management and Decision Processes Center, recently spoke with the Knowledge@Wharton show on SiriusXM channel 111 about their book, Mastering Catastrophic Risk: How Companies Are Coping with Disruption.

An edited transcript of the conversation follows.

Knowledge@Wharton: How did the two of you come to collaborate on this book?

Useem: If you think about the two terms that Howard has referenced, risk and leadership, they go together in this case. Often, we think of those as something separate. Risk — we’ve got to be analytical and disciplined, and it’s often technical. Leadership — it’s all about having a vision and setting a strategy. But we concluded, after talking with quite a few people and companies’ directors, executives and senior managers that the time has come for the conjoining of these two terms. Many companies now are self-conscious about appraising risk, measuring risk, managing risk and ensuring the company is ready to lead through a tough moment the risk has caused.

Knowledge@Wharton: Is this a recognition that has developed recently, compared with the executive mindset of the 1950s, ’60s, and ’70s?

Useem: Yes. I think what really got us going on the book in terms of the timing is exactly what you’ve referenced. Ten or 15 years ago, no companies had a chief risk officer. Risk was barely mentioned. The term “enterprise risk management” (ERM) was not even around. But if you look at any trend line out there, what do people worry about when they get together at watering holes for senior management? Risk now is on the agenda just about everywhere, for good reason: Because the risk that companies have faced in recent years has gone up. The catastrophic downside of big risk also has increased. More risk, more downside, more people are paying attention.

Kunreuther: One of the really interesting issues associated with the study and our interviews with senior management is that, before 9/11, there was very little emphasis by the firms on low-probability events — the black swan events. Starting with 9/11 and continuing through to today, these issues now have become more important, and black swans are now much more common than before. As a result, firms are paying attention. When we interviewed people, they were very clear with us that now that the events have occurred, they are putting it high on the agenda. As Mike has indicated, the boards and all of senior management are now paying attention to it, so it’s a big, big change.

Knowledge@Wharton: Certainly, 9/11 was an impactful event on the country, but it was followed a few years later by the Great Recession. How did that change the view of risk?

Useem: We raised the question in these in-depth interviews with people inside the company, whether on the board or in the management suite, and they consistently said that four events became a wake-up call or an alarm bell. First, 9/11 got us thinking about the unthinkable. A couple of hurricanes came through, including Sandy, which was a huge event. The recession or the near-depression back in 2008, 2009. Who thought that the Dow was going to lose 500 points in a day? Who thought Lehman was going to go under? But it all happened. And finally, the events in 2011 in Japan with the enormous tsunami after a 9.0 earthquake that left probably 25,000 people dead and set a fire in a nuclear plant.

Even if you were a company that was not touched, just look at the four points on a graph. The costs are high. Many companies are impacted. Everybody thought, let’s get on with enterprise risk management. Let’s make it an art.

See also: How to Improve ‘Model Risk Management’  

Knowledge@Wharton: How have business leaders changed their thinking about risk management because of those four events?

Kunreuther:  Leaders are now saying, “We have to put risk on the agenda. We have to think about our risk appetite,” which they hadn’t thought about before. “We have to think about our risk tolerance.”

Financial institutions played that role, and they were very clear about that right after the 2008-2009 debacle. They had to ask themselves very explicitly that question. But I think this is now much broader than that. Leaders have recognized that they also have to think longer-term. This is one of the issues. We have a framework that we’ve developed in the book that tries to combine some of the work that has come out of the literature that Daniel Kahneman has pioneered on thinking fast and slow — by indicating that intuitive thinking is the mindset that we often have. Thinking myopically. Thinking optimistically. Not wanting to change from the status quo. Leaders have now recognized that they have got to put on the table more deliberative thinking and think more long-term. That is a change, and they tie that together with risk.

One of our contributions, with respect to the book, is to try to put together a framework that really resonates with the leaders and the key people in the organization so that they can respond in a way that makes sense.

Useem: We asked a lot of people who are in the boardroom, if they go back 15 years, was risk, cyber risk or catastrophic risk in board deliberations? The answer typically was no. Ask the same people about today, and they say, “Of course.” We watched with horror what has happened with some of the cyber disasters at Target and elsewhere, and no board worth its pay is these days unconcerned about risk. Now, you’ve got to be careful. The board works with management, sets the vision, does not micromanage. But what boards are increasingly doing is saying to management, “Let’s see what your risk tolerance is. Let’s see what your risk appetite is. Let’s see what measures you already have in place. Nobody wants to think about the unthinkable, but let’s think about it.”

Knowledge@Wharton: The fake accounts scandal at Wells Fargo and the emissions controversy at Volkswagen are two recent examples of risk that you document in the book. Can you talk about that?

Useem: We don’t mean to pick on any company, and we don’t mean to extol the virtues of any company. But we can learn from all. Howard and I took a look at the events at Wells Fargo, which were extremely instructive. No. 1, the company put in very tough performance measures. They told employees, you’ve got to get results, otherwise you’re not going to be here in 12 months. But there was not a recognition that very tough performance indicators without guardrails against excess of performance was a toxic mix. We’ve seen what happened to Wells Fargo. They’ve paid billions in fines. The Federal Reserve has a stricture right now that Wells Fargo cannot accept one more dollar in assets until it can prove to the Fed that it has good risk measures in place.

We also document in the book the events with Volkswagen, which had the so-called defeat devices intended to report if a VW vehicle was brought in for an inspection, that the emissions were meeting U.S. standards. In fact, the software just simply was fooling the person looking at the dials. That, apparently, went all the way up to the top. We’ll see what’s finally resolved there.

Wells Fargo and Volkswagen took enormous hits in terms of reputation, brand, stock price and beyond. We also document a bit the BP problems in the Gulf…. They’re instructive.

Kunreuther: We didn’t interview anyone with respect to Volkswagen, but we did have public information, and it’s included in the book. The reason that we felt it was so important is that VW felt that this was a low-probability event that they would be detected, and they put it below their threshold level of concern. They emphasized the optimistic part of this, which was to say, “Let’s see what we can do as a way of really improving our bottom line.” What we do in the book is give a checklist to people, to companies and to individuals. We see it as a broad-based set of checklists on how they can do a better job of dealing with that.

What we really say is: Pay attention to these low-probability events. If you think not only in terms of next year but over the next 10 years, what you can see as a very low-probability event would actually be quite high over a period of time. If you begin to think long-term, which is what firms want to do, you pay attention to that.

Knowledge@Wharton: There’s such an economic impact on the company when these issues can’t be resolved quickly. Toyota, for example, has been dealing with its airbag problem for several years.

Kunreuther: You tie the issue of getting companies and directors to pay attention to the low probability, and then you say to them, “Construct a worst-case scenario.” Put on the table what could happen if it turns out you were discovered, or if there is an incident that occurs, or an accident, as Mike was saying on the BP side. What’s going to happen to the company? What will happen to its reputation, its survival, its bottom line? Our feeling is that, if you can begin to get people to think about the appetite and tolerance in the context of these low probabilities that could be quite high, then I think you have an opportunity for companies to pay attention. And they’re doing that, as Mike and I have found out in our interviews.

Knowledge@Wharton: What about when the disaster is a natural phenomenon, such as the volcanoes in Hawaii and Guatemala? Companies have to be prepared, but they can’t control what happens.

Useem: As we’ve watched the events unfold in Hawaii and Guatemala, it’s a great warning to us all that the impact of natural disasters worldwide is on the rise. There’s just no other way to describe it except a graph that’s going up, partly because people are living closer now to some of the places that historically are seismic. Hurricanes are possibly being intensified by global warming. There are more people along the Florida coast. All that being said, natural disasters are obviously in a much bigger class of disasters.

[Since] we wrote this book for people to be able to think through their own catastrophic risk management, we offered [examples] from the experience of other large companies, mainly in the U.S. We have a couple of German companies that we focused on: Deutsche Bank, Lufthansa and so on. We suggest that the vigilant manager, the watchful director, ought to be mindful of 10 separate points. One is, be alert to near-misses. What we mean by that is, “There but for the grace of God go I.” If I’m an energy producer, watch what happened to BP in the Gulf. Let’s learn from what they went through.

The A-case for me is Morgan Stanley, which had been in the South Tower of the World Trade Center when 9/11 hit. Because of the events eight years earlier — in 1993, a bomb had gone off in the basement of the World Trade Center — the risk officer at Morgan Stanley said, “Who knows what else might happen? That was a near-miss.”

Rick Rescorla, [vice president for corporate security,] insisted that Morgan Stanley every year practice a massive drill of evacuating the tower. When 9/11 occurred, the North Tower was hit first. Morgan Stanley is in the South Tower. Rescorla said, “Let’s get out of here,” and he managed to evacuate almost all 4,000 people. He was one individual who did not get out. He went back in to check. He is a hero for Morgan Stanley and many other people, but the bigger point taken from that is: Learn from the world around us, because these developments are intensifying. The threats are bigger. The downside is more costly.

See also: 3 Challenges in Risk Management  

Kunreuther: Near-misses are important in any aspect. But the other point that I think is important for today is another part of the checklist: Appreciate global connectedness and interdependencies. That point really became clear with Fukushima and with the Thailand floods. We asked each company what was the most adverse event that they faced? They had the complete freedom to say anything they wanted. The death of a CEO could have been one. Kidnapping was another. But as Mike indicated earlier, Fukushima was a critical one, and so were the Thailand floods. These were companies in the S&P 500, but they were concerned about how they were getting their parts, so supply chains were very important. They recognized after Fukushima that they were relying on a single supply chain that they couldn’t rely on for a time.

Knowledge@Wharton: How can a company prepare for the unexpected death of a CEO?

Useem: From looking at the companies that are pretty far into it, all we’re calling for is getting those risks figured out, then having in place a set of steps to anticipate. It’s like insurance. The best insurance is the one that never pays off because the disaster has not happened. The best risk management system is the one that’s not invoked.

In the book, we get into the events surrounding a fatal Lufthansa crash. Within minutes, they were in action. Within minutes, they had called the chancellor of Germany. Within minutes, they had people heading to the scene, not because that’s what they do but because they had thought about the unimaginable, and they had in place a system to react quickly. You have to deal with an enormous amount of uncertainty when disaster strikes. Premise No. 1: Be ready to act. Premise No. 2: Be ready to work with enormous uncertainty, but don’t let that pull you back from the task ahead.

Time to Put Self-Driving Cars in Slow Lane?

A self-driving Uber car fatally crashed into a pedestrian in Tempe, Ariz., last month, tragically illustrating the fears that some of us have long held about the dangers of these technologies. The woman appeared from a darkened area onto a road, and the police said the accident would have been hard to avoid even with a human driver behind the wheel. Yet this is not the way it was supposed to be: Autonomous cars were supposed to be better than humans in exactly such situations.

The lidar, radar and cameras that self-driving cars employ are designed to have advanced vision, and their computers have the ability to make instantaneous decisions. Yet the crash suggests that the technology may not be ready for prime time. The race among technology companies to be the first to put these cars on the road is having fatal consequences.

Uber’s self-driving vehicle system appeared to have several flaws, according to my colleague Raj Rajkumar, who heads Carnegie Mellon University’s self-driving laboratory. As he explained in an email, “What we saw on the video indicates several trouble spots with the Uber approach, design and software capabilities. There is a serious mismatch between its sensor configuration and actual usage contexts. For example, even though Uber’s self-driving vehicle has multiple cameras, their usefulness at nighttime is extremely limited at best and add no value during those dark hours when they do operate the vehicles.”

See also: The Unsettling Issue for Self-Driving Cars  

Rajkumar also didn’t let the operator off the hook. “The operator’s role is to act as the safety backup — when the technology fails, (s)he is required to step in. The operator in this case was distracted for a shockingly long duration of time, which culminated in the death of the pedestrian,” he wrote.

The reality is that self-driving cars are far from being able to coexist with humans on local roads. Both sides are learning. It is one thing for a human to put the car into autopilot on a highway and another to navigate city streets onto which adults, children and animals may suddenly wander. Autonomous cars need to be relegated to special tracks and highways for at least two or three more years, until they can deal with such contingencies.

To be clear, I am not an opponent of the technology. I own a Tesla Model S and am comfortable with letting the car take control of the wheel on highways — despite the fatal Tesla crash that occurred in 2016. But using autopilot on local roads is as dangerous as using cruise control on local roads: You just shouldn’t do it.

Toyota did the wise thing by halting testing of its autonomous cars on local roads. All other makers of autonomous cars need to do the same. Or governments may need to call the race off by declaring a moratorium until the vehicles to be road-tested demonstrate certain minimum capabilities.

See also: The Evolution in Self-Driving Vehicles  

Self-driving cars may bring profound improvements in our lives and slash accident and fatality rates, saving millions of lives. They could reduce the need for ownership, because we would be able to share them, and they could deliver incontrovertible social benefits, offering the disabled on-demand personal drivers. People living in the country could finally gain access to transportation services that put them nearly on par with their city cousins. Crossing or walking next to roads may cease to be a high-risk activity.

And, eventually, these autonomous systems could replace humans at the steering wheel, just as horseless carriages replaced the horses. But injudiciously rushing into autonomous driving will lead to unnecessary accidents, justifying calls to outlaw it and halting progress of the technology. It is better to proceed cautiously with it and ensure that the rewards outweigh the risks.

Are You Innovating in the Dark?

The insurance industry is ripe for disruption, drawing a flood of investment and spurring all sorts of smart conversations. But many insurance companies today are either confused or are just shooting in the dark hunting that “big thing” (unknown) in the name of innovation.

The good news is that the fear of disruption has pushed the innovation agenda for many companies. But there are only a handful of players in the industry who are taking innovation seriously. For such companies, innovation is never accidental, seasonal or impulsive. Rather, it is an integral part of the company’s culture of organization and is a continuous process.

Are you a victim of “innovation phobia?”

Innovation makes many players in the industry nervous, forcing them to act fast to do something innovative or deliver superior values to clients in difficult times, spurring a reactive innovations race in the market.

The sad part is that such “knee jerk” reactions last for short lifespans and do not deliver any value to an organization. Typically, such momentum often dies within 12 to 18 months because of reasons such as change of organization priority, leadership change, shortage of funds, skill shortage, poor support within an organization, company politics and resistance of companies to change. Companies burn millions of dollars each year in the name of reactive innovation. Is it time for organizations to assess if they are the victim of the innovation phobia? Are there better ways to use their funds? The answers are yes.

See also: How to Create a Culture of Innovation  

Build meaningful offerings, not just elegant facilities and prototypes

In the last 12 months, innovation activities have ignited insurance industry collaboration with startups and insurtech. Other innovation players are picking this up, which is a good thing and a positive sign for the industry. Keywords such as “incubator,” “accelerator,” “innovation labs,” “garages” and  “design thinking” are gradually becoming the jargon of the insurance industry. Many companies have built (or are building) large, elegant facilities for innovating, assembling teams, creating fancy prototypes and leveraging newer technologies. Few companies are funding startups and few have started separate venture capital funds to capitalize future opportunities. Things are really changing — and fast.

Still, the big questions remain:

  • Are these real attempts toward innovation?
  • Are these meager reactions triggered because of innovation phobia?
  • Are these attempts to create a market illusion that your company is innovating?

None of the above aspects can guarantee success. The hard reality is that such efforts are not sufficient for innovation. Innovation is not about building fancy facilities or shiny prototypes that anyone can mimic easily. It is not about the number of experiments or proof of concepts you are developing. It is also not about the number of hackathons you sponsor or the total partnerships you have with startups or insurtech firms.

It is about creating something meaningful for customers that is distinctive in the market and gives you a long-term competitive advantage. And it is about understanding your future customer’s needs, market insights and evolving industry trends in a timely manner (ahead of your competitors) and about building something meaningful that customers will value the most.

Addressing the “missing” elements of innovation in your organization

Innovation is not an easy thing and cannot happen as a matter of reactive actions. Unless organizations build a culture for innovation; make it a continuous process; invest in people and capabilities; and commit themselves for long-term innovation, any efforts toward achieving innovation are going to be shortsighted. Failures are an inevitable part of innovation, so building a culture that encourages failures and motivates teams to think big, imagine the future, gather insights, validate assumptions and deliver value with greater agility are important part of innovation. It is time for companies to be honest and discover the missing elements of innovation in their organization. Innovation is about building a foundation for the future of the company; it is about creating a futuristic business, talent, expertise and the people of tomorrow.

Many of today’s innovation efforts are merely trying to keep pace with the emerging technologies — such technologies are threatening the existing business models of insurance companies. If you look closely, you would agree that such scenarios have existed for many decades in the industry. It is impossible to keep the same business pace when technological changes are maturing and evolving at a faster pace. There is a need to look for some missing element in your organization, which, when paired with emerging powerful technologies, can bring the real innovation out.

Invest in market intelligence and competitors’ moves

Successful innovation demands long-term organizational commitment, unique market insights, customer validation-feedback, talent, organizational agility and correct assessment of timings of market readiness for any new value proposition.

If you look closely at the history of some of the most successful innovation companies (such as Google, Apple, GE, P&G, PepsiCo and Toyota), you would notice that such high-performance companies have assessed the market, customer behavior and competitors’ moves very cautiously and constantly and have made appropriate investments in the journey for innovation. These companies have built an innovation culture over years. Unfortunately, today, companies do not have the patience to gather the right intelligence on the market and the insights on customers’ behavior. And many companies just want to take advantage of becoming the first movers without doing the proper homework about market readiness, competitors, customer needs and the industry preparedness.

Beware of those fancy insights that everyone knows

Many companies’ innovation agendas get biased and influenced by a few survey results from the top consulting and analyst firms; few companies are also using future market size projections from the global research companies as a part of justification for the company’s innovation efforts. By and large, the entire insurance industry is referring to the same set of intelligence and insights. If that is the case, there is little possibility that meaningful offerings would emerge that can disrupt the industry as a whole. If you are going to create another new-style offering (similar to that of others or that can be mimicked easily), by leveraging the similar market insights and similar technologies, your innovations efforts are likely to deliver poor results.

Beware of those commoditized insights and research reports that may distract you from doing genuine innovation.

See also: Innovation Won’t Work Without This

You must invest in assessing market intelligence and customer intelligence continuously. Your futuristic offerings are likely to be as differentiated as those of the unique market and customer insights you gather. Align your innovation efforts accordingly, leveraging the best proven technologies and the expertise of your people and partners.

Going back to basics

Industry players must assess if they are addressing innovation requirements holistically. How accurately a company infers future market movement, customer behavior and demands — and creates offerings in a timely manner ahead of its competition — plays a critical role in the success of innovation. If you think this type of innovation sounds more like gambling or shooting a gun up in the air, you are advised to spend your money on some other initiatives that can improve your business performance faster.

Now is the time to invest in your people and build capabilities (underwriting, risk management, sales and distribution, claims, etc). It is the time to build core foundations and address the missing elements of innovations within your organization.

Conclusion

Innovations are critical for a company of any size. Insurers must commit themselves to innovating and must build an innovation-centric culture in their organization. Insurers must honestly assess if they are a victim of innovation phobia and must address the missing elements and innovation gaps in their organization. The distinctiveness of market insights, customer preferences, competitors’ moves and industry readiness plays an important role in the potential success of the innovation. Innovation is never accidental but, rather, is a continuous process that requires the best talent, best capabilities and agility. The role of technology and the startup community cannot be ignored in innovation. Insurers must stop innovating in the dark and instead start fixing the broken elements that are hindering the company’s growth.

Learn about Innovator’s Edge, a first-of-its-kind insurtech matchmaking platform.

Are You Ready for the IoT?

It’s no longer a question of whether insurers should prepare for the Internet of Things (IoT), but when and how to do so. Connected cars and homes are already here, with Ford’s CEO predicting driverless cars on the road by 2020 (the same year that Toyota plans to launch its driverless car).

But preparing for the IoT isn’t just about adapting existing business models or launching new services. It’s an opportunity to innovate and develop new business models, ways of working and ways to understand risk. It’s a chance to better connect with customers, to reinvent the claims process and to become an integral part of people’s lives.

Keys to success in the IoT

Accenture has identified five keys to success for insurers to capitalize on IoT opportunities. This week, I’ll look at two of them:

  • Choose the role you intend to play. Accenture’s Technology Vision for Insurance 2015 identified the need for insurers to become part of a digital ecosystem. Insurers must consider how they will collaborate with their ecosystem partners, and whether they will play a leading or supporting role. Either way, how will they administer the claims that result from the ecosystem and its partners? Further, insurers may need to tailor their approach for each market, business or region-and must bear in mind that, no matter what, they must offer a differentiated customer experience that delivers more than just claims administration.
  • Adopt a three-layer model for claims. The IoT demands a shift from one-to-many (one experience for many customers) to one-to-one (personalized service, delivered at scale), and a three-layer model can help insurers achieve this. As shown below, it’s based on a foundation of product, upon which is layered technology and then service. Together, the layers enable insurers to offer a customer experience characterized by convenience and seamlessness-which should be cornerstones of the overall experience, and especially the claims experience. For claims leaders, the three-layer model presents opportunities to leverage new forms of technology for a more nuanced understanding of risk and liability. For example, a car accident involving a connected car can provide precise data about speed, direction and driving conditions. Claims leaders should also consider how they can plug into the extended services that are part of the three-layer model. How can they work with lifestyle partners within an ecosystem to ensure that claims can be administered effectively and efficiently?

chart

That’s some food for thought in the holiday season. I wish you a safe and happy holiday season and look forward to wrapping up this blog series in the new year. I’ll be back in January to share three more keys to success for insurers in the IoT.