Technology on a tear

Area executives chime in on a future with driverless cars and drones.

From the pages of In Business magazine.

Google those somewhat frightening words “driverless cars” and you’ll likely see a litany of intriguing headlines: “U.S. Secretary of Transportation: Driverless cars all over the world by 2025,” “Uber fleet to be driverless by 2030,” “Ford CEO expects fully autonomous cars by 2020,” “IEEE (Institute of Electrical and Electronics Engineers) predicts up to 75% of vehicles will be autonomous in 2040.”

Then there are drones, which are those “pilotless” contraptions that are expected to be one of the most popular gifts under the Christmas tree this year, with an estimated 700,000 sold in 2015 alone. With their ability to take photos and videos as they whiz near and far, unsuspecting consumers could soon become YouTube stars. Remember mom’s uncanny ability to have “eyes in the back of her head?” Multiply that by a million.

Rather than fear the inevitable, companies worldwide are learning, adapting, and believe it or not, preparing to help consumers through the electronic haze.

The insurance industry is one that many studies predict will be most affected by technological changes over the next several years.

“Exponential growth in technology is driving consumers’ expectations,” notes Ryan Rist, director of innovation at American Family Insurance. “Younger generations don’t want to call a taxicab company anymore and wait 20 minutes for a cab to show up.” Enter Uber, which he describes as a frictionless process of going from point A to point B. It’s quick, personalized, and relatively inexpensive. It also makes owning a vehicle less necessary.

Even George Jetson may not have foreseen the existing and emerging technologies quickly transforming life as earthlings once knew it. The question is how will businesses adjust?

To understand that, let’s first look at what’s going on out there.

Future stock

For those who ever thought insurance was “boring,” meet Rist, 37, who lives and breathes technology every day. “When we started looking at drones three years ago, people thought we were kind of crazy,” he admits. “Now, it’s all over.” The company has focused particular attention on driverless (autonomous) car technology, drones, and smart homes, and the effects each could have on the insurance industry.

“The future of autonomous cars is really about transportation,” Rist explains. “The Uber model, plus the self-driving car idea, is that we will no longer need to buy $20,000, $30,000, or $40,000 vehicles because we’ll be able to rent public transportation and customize it to our needs.”

Some predict auto insurance will become a thing of the past or be drastically reduced, he says, “because in the world of autonomous cars, there will be no crashes.” Worldwide, over a million people die on the roads annually. “We’ll think that was barbaric because we’ll now have cars that can sense and avoid that.”

Meanwhile, IEEE, in a survey of over 200 experts, predicted that rear view mirrors, horns, and emergency brakes will be removed from mass-produced cars by 2030, and that by 2035 cars will operate without steering wheels and gas pedals. Last year, Google announced that it would be building a fleet of cars without steering wheels.

Such innovations could signal the end for auto manufacturers as we know them, some say, only to be replaced by Tesla, Google, Apple, and Uber. “Those are the players that will be around because they’re really in tune to what the customers want and how they can deliver a better experience,” Rist says, adding that many believe these changes could occur within the next 10 years.

With timelines getting shorter, AmFam made the conscious decision years ago to proactively invest in the technology space. One area showing a lot of growth potential is smart-home technology, which is driven by consumer demand and uses sensor technology tied to smartphones. Smart homes include features like smart thermostats, smoke detectors, water sensors, coffee makers, and stoves — all of which can alert a homeowner of problems before they escalate, potentially reducing damage to property or worse.

One company AmFam has invested in has developed a connected doorbell, alerting homeowners when someone approaches their home. “About 70% of thefts start at the front door of your home, according to the FBI,” notes Rist.

If you think your mother had eyes in the back of her head, just wait until the photographic and video capabilities of drones become more prevalent.

Similarly, drones will become a positive insurance tool, Rist says, particularly when it comes to catastrophe response, because insurance agents are often among the last allowed in to inspect a site. The ability to send a drone to collect data and photos will allow insurers to respond more quickly to their customers.

From an adjuster standpoint, drones will also allow insurance companies to collect detailed information about properties without requiring adjusters to travel long distances, climb up on roofs, or go into areas that may not be particularly safe.

“We’re one of five companies that have successfully petitioned the FAA to get [an exemption] allowing us to use drones commercially,” Rist notes, admitting that implementation is still a ways out as systems are tested and validated.

“Technology is advancing faster than our ability to consume,” he says, “so we’re working on consumer adoption. Many people still don’t know these technologies exist.”

(Continued)

IB asked several Dane County executives for their thoughts on future technologies and how they might impact their businesses:

Sean Baxter, president, Kayser Automotive Group

“There are already semi-autonomous features on cars today — park assist, lane-changing alerts, adaptive cruise control — but to be completely driverless seems a stretch for me today. Still people are investing millions into the technology, so there might be something to it. Before it gets to that point, though, it will show up in individual features as opposed to a fully driverless car.

“In our industry, the big manufacturer push around consumers is big data — and the ability of dealers to partner with vendors who can help target customers meeting the right demographics. For example, we could put a ‘geo-fence’ around our competition, and if any of our customers or people we’ve identified as our guests go onto that lot, we’d be able to send them a text message or ad on their phone or at their home.

“Ford and other automakers are also trying to push cars to talk to the Internet 24/7 so you don’t have to go to the dealership to have systems updated. If your car needs a systems update, they could just ping every Ford on the road and download that update, and then you don’t have to visit me. But there are plenty of other things local dealerships can take care of.

“So it’s less about part failures and more about software updates. Our repair guys, who always had a toolbox full of tools, are becoming IT technicians.”

Nick Jarmusz, director of public affairs, AAA Wisconsin

“I think the notion of driverless cars being prolific on the roads in 5–10 years is extraordinarily optimistic. Even when a feature becomes available or standard, it takes a long time for that to trickle down to the general populace. In 2011, electronic stability control was made standard on 90% of vehicles being sold in that model year. It’s projected that it will be at least 2030 by the time 90% of vehicles on the road have it because things happen so slowly.

“From an insurance standpoint, there are already disagreements within the auto industry as to where [driverless car] liability should rest. Volvo says it assumes liability for passengers. Tesla says the drivers should bear the responsibility.”

Gary Keen, president, Wisconsin Copy & Business Equipment/Doc Jams

“It’s so important in our business to have personal contact. I’m always looking at my fuel bill, and I’ve eyed up electric vehicles, but my issue there is the limited range on a fully electric car.

“But driverless cars — that’s fascinating to me, just from the standpoint that my sales people could work on their laptops while being driven around. We have about 15 cars out there on the road.

“Would I trust a driverless car to be driving me around? It’s a computer, and every time you hear that there will be a ‘seamless changeover,’ you know how that goes …”

Susan Rather, co-owner, Brightstar Care

“With the aging population, I think the idea of driverless cars and seniors is fabulous, but technology will never replace interactions between people. That’s the downside, and our younger generation is already so into technology that they kind of forget how to relate. Recently, I saw a guy speak at a conference. He has a four-year-old son and was quite confident that his son will never need a driver’s license.”

Rick Bourne, president/CEO, Home Health United

“We often have a hard time finding volunteers during the day to deliver meals on wheels. Could a drone do that, delivering food in a hot or cold pack? We’d lose the personal contact, though, and the ability to check on individuals at the same time, which is crucial.

“Current industry technology allows us to monitor patients on a daily basis so they can stay in their homes and allow us to provide interventions more quickly. That’s an area that will continue to be refined.”

Doug Dittman, president, Neckerman Insurance Services

“What we’re seeing is the impact of Uber and Lyft, and how kids may never even need a car. I have a friend in L.A. who just got tired of battling traffic so he got rid of his car and uses Uber for everything.

“And we’re just at the cusp of the technology drones will provide. In rural areas especially they’ll be able to pinpoint specific addresses to monitor roofs or the condition of a home. It’s so expensive for an insurance company to provide these services, but to have a drone do that would mitigate the costs so much more and make things so much more efficient.”

Michael Koval, chief of police, city of Madison

“The Centers for Disease Control show that fatalities owing to traffic incidences probably happen on an annual basis of 33,000-plus per year. That’s incredibly jaw dropping. Many of these accidents are preventable and … due to distracted driving.

If you think your mother had eyes in the back of her head, just wait until the photographic and video capabilities of drones become more prevalent.

“If [technology] could be taken to that level of sophistication, then clearly our officers’ focus could be shifted from writing traffic tickets and handling accidents to managing other serious crimes or doing more relational things within the auspices of community policing. Drunk driving incidents should go down. The upside is incredible.

“Regarding drones, I take a loftier concern. I’m big on privacy. I know that a lot of these will be equipped to handle cameras, and I’m glad that there are current statutory privacy issues in place looking at some of those concerns. But I’m also pleased that, as we’ve seen as close as Middleton, drones were used by the cops in public places for active search and rescue operations, or locating an escaped prisoner or someone you wanted to place under arrest, or even to surveil a place as you’re getting ready to execute a warrant. Those are appropriate when they’re used to prevent imminent danger to others.

“The cerebral side of me always worries about invasion of privacy. The cynical-cop side wonders how this thing will be cannibalized to wreak havoc on innocent people. It’s the 95-5 rule. Ninety-five percent of those purchasing drones will respect, abide by, and conform to rules and regulations. It’s always the five-percenters who keep me busy.”

Rose Molz, president, EZ Office Products

“I see weight as an issue with drones from a delivery perspective. And when deliveries happen, who is there to meet them?

“Driverless cars freak me out a bit because I would be relinquishing some control.

“But regarding technology, I never say never. My nieces and nephews have no concept of a rotary phone, or a phone with a cord attached. Very smart people once said people would never have computers in their homes, or that online shopping would never happen. Then, in the 1970s, we were all going to switch over to the metric system!

“But when it comes to technology, anything’s possible.”

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