Navigating the Impact of Vehicle Automation on Commercial Auto Reserving
Industry context and challenges
The presenters opened by noting persistent industry pressure, including combined ratios which exceeded 100% every year from 2011–2024 (except for 2021 due to COVID-19). Contributing factors include adverse prior-year reserve development (relative to the broader P&C industry), third-party litigation funding, lawsuit abuse concerns, and historically insufficient pricing despite double-digit rate increases in many states.
Autonomous trucking: Promise and caveats
Autonomous trucking is expected to cut costs for trucking companies by roughly 30% — not only from lower driver costs, but also because trips will be quicker due to fewer mandated breaks and shift changes. Safety gains are also anticipated due to the removal of driver error, and AVs could help address current driver shortages. Claims such as Peter Vaughan Schmidt’s, CEO of Torc Robotics, that driverless trucking technology is “solved” reflect progress but may be overly optimistic as current AV deployments are concentrated in cities with stable weather and little snow (e.g., Atlanta, Austin, Los Angeles, Phoenix, San Francisco).
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