Rick Gorvett, FCAS, CERA, MAAA, ARM, FRM, Ph.D., Professor and Chair of Bryant’s Department of Mathematics, is one of the country’s top actuarial science and enterprise risk management experts. He served on the Casualty Actuarial Society (CAS) Automated Vehicles Task Force, responsible for researching the insurance and risk management implications of autonomous vehicles (AVs, also known as self-driving vehicles or driverless cars).
With his extensive background on AVs, Gorvett was recently invited to share his expertise with the London School of Economics (LSE) on March 20. His presentation, "Automated Vehicles: Insuring a Driverless Car," examined the evolution and technical foundations of AVs, the risks associated with the development and deployment of these driverless cars, and the potential changes necessary to the actuarial pricing and legal underpinnings of the auto insurance industry.
“If we overestimate and overprice AV risk, we might erroneously delay the coming to market of a life-saving technology. If we underprice or underestimate AV risk, we might prematurely introduce a technology that’s not yet ready for prime time.”
How safe is safe enough? And, how costly?
In his talk at LSE, as well as many previous presentations on the topic to business and higher ed audiences, Gorvett stressed the need for more and better data from which to evaluate the risks associated with AVs. Self-driving cars represent a new technology – as well as a potential societal shift. Given their newness and uniqueness, Gorvett asks, “How safe is safe enough? And, how costly? When do we put these new vehicles on the road?” The ability to “price” the risk of AVs, which requires good data, is critical to answering these questions. “If we overestimate and overprice AV risk, we might erroneously delay the coming to market of a life-saving technology. If we underprice or underestimate AV risk, we might prematurely introduce a technology that’s not yet ready for prime time.”
A call for collaboration
An actuary who focuses on identifying, quantifying, and managing risk, Gorvett strongly believes that risk must be analyzed and interpreted in a multidisciplinary, contextual framework. “Risk data must be considered within the context of the total environment in which it emerged – and this is as true for risks associated with AVs as any other risks,” he says. Although he understands the occasional need for data to be proprietary in a competitive market, he believes that “we would be better prepared for a world with driverless cars if there were more collaboration and data-sharing, and a more systematic approach to data collection, amongst all those involved in the AV effort. That includes automobile manufacturers, AV technology companies, regulators – and insurers and actuaries, who tend to be the ‘arbiters’ of risk in our society.” It’s Gorvett’s hope, for the sake of both safety and technological progress, that these kinds of cooperative efforts will increase in the near future.
Discussions in the classroom
Gorvett brings his real-world experience and perspective, supplemented by cutting-edge research, to his classes. This provides a basis for, not just an understanding of current events and issues in the risk and actuarial professions, but also a solid foundation from which students can respond and adapt to future trends and challenges in their careers.
“My goal is to provide students with multidisciplinary, interactive projects and case studies that mimic both real-world applications and the multidisciplinary, group-based approach to finding solutions that are so critical for success in business."
“My goal is to provide students with multidisciplinary, interactive projects and case studies that mimic both real-world applications and the multidisciplinary, group-based approach to finding solutions that are so critical for success in business,” he says. Autonomous vehicles are just one example of the types of relevant discussions taking place in Professor Gorvett’s classroom.
