Challenge Statement

We are challenging the next generation of innovators and global problem solvers to develop robust models of how autonomous cars are going to revolutionize our future. How is this new technology going to impact transportation? Healthcare? Our communities? What about the insurance industry? To compete in this challenge, students will research the self-driving vehicle industry, develop their own models of the future of this technology, and present those models to professional actuaries for review.

Submissions must identify the changes and impact that students foresee autonomous vehicles having in three areas:

  1. The Transportation Industry
  2. The Insurance Industry
  3. Society at large.

In each of these areas, students must describe the mathematical models used to analyze and predict the risks, opportunities, and overall changes to these industries.

Part 1: The Transportation Industry

Using data about the current automobile industry, create a model for how autonomous vehicle technologies will change the transportation industry as a whole, or some sub-section thereof (shipping, commuter travel, passenger car sales, etc.). How do you expect the industry or sub-industry to change over the next 10+ years? Identify and characterize one or more segments of the transportation industry that would be affected by introduction of autonomous vehicles. Quantify the change using mathematical models. In this section of your Modeling the Future report, respond to these topics:

1. Projections in the Absence of Autonomous Cars: As part of your model identify how you expect the transportation industry (or selected sub-section) would change over the next 10+ years in the absence of autonomous vehicles. Look at historical trends and data to make your projections for the next 10+ years. Identify projections in these two topics:

  • Employment: Based on historical data, how do you foresee employment in the transportation sector (or sub-sector) to change in the next 10+ years?
  • Sales, Revenue, and Profit: Based on historical data, how do you foresee sales, revenue, or profit numbers for the transportation sector (or sub-sector) to change in the next 10+ years?

2. Projections With Autonomous Cars: Review data about autonomous vehicle technology and, combined with the other data you have researched about the transportation industry, project how you expect autonomous vehicles to change the industry over the next 10+ years. Indicate what percentage of the industry (or industry sub-sector) you expect autonomous vehicles will become (Will it be 10% of vehicles? 50%? 100% and when?). Be sure to describe the mathematical models used to make your projections. Describe your forecasts in two areas:

  • Employment: How will the adoption of autonomous vehicles affect how many employees transportation companies require? How will this deviate from what you expect if there were no autonomous vehicles?
  • Sales, Revenue, and Profit: How will the adoption of autonomous vehicles affect the sales of companies in the transportation sector? Will they increase, decrease, or be un-affected from what you expect in the absence of autonomous vehicles? Will it change the delivery time of cargo? The length of passenger trips in taxis? Decrease/Increase the number of private vehicles sold?

For Part 1 of your report, you may want to start your research here: https://www.mtfchallenge.org/resources/transportation-industry-data/

 

Part 2: The Insurance Industry

Insurance plays a key role in making our transportation sector run. Without a successful insurance system, our transportation structure would look very different. With the addition of self-driving vehicles to the transportation scene, the insurance industry is also going to have to modify how it insures drivers, companies, and vehicles. In this section of your Modeling the Future report, use any data available to model recommended changes to future insurance policies. Identify and describe the mathematical models or analysis techniques you use to make your projections. This section of your report should respond to the following topics:

1. Projections in the Absence of Autonomous Vehicles: Review the historical data on passenger cars and insurance claims. Build a model of claim counts and sizes as functions of miles driven, numbers of cars on the road, and any other variables you think would be relevant to insurance companies. Make mathematical projections as to how you expect these trends to continue over the next 10+ years in the absence of autonomous vehicles. Will the number of cars on the road change? What about the average length of trips? Are there other ways travel may change in the future without considering the adoption of autonomous vehicles that may affect insurance?

2. Projections With Adoption of Autonomous Vehicles: Review articles and data on the adoption of self-driving vehicles, and develop your own model about how these vehicles will change transportation variables important to the insurance industry (how many cars are on the road, how many miles are driven, age of drivers, and any other variables you think might be relevant to the insurance companies). Identify how these changes may affect the insurance industry.

3. Projections of Changes to Insurance Claims: Make projections on how you expect the addition of self-driving vehicles over the next 10+ years to change insurance claims based on their impact on these variables. Will insurance claim quantity and sizes increase, decrease, or remain unchanged? How will insurance companies modify their pricing for insurance policies based on these changes? Will they increase, decrease, or remain unchanged? Are there other affects autonomous cars will have on the insurance industry?

For Part 2 of your report, you may want to start your research here: https://www.mtfchallenge.org/resources/insurance-industry-data/

 

Part 3: Society At Large

A technological shift such as that provided by autonomous vehicles is bound to impact many areas of society, not just transportation. In this section of your Modeling the Future report, examine how the adoption of self-driving vehicles over the next 10+ years will affect another aspect of society. Will it change our healthcare system? Will it change how far people commute to work? Will it impact the structure of our cities and communities? Will it change the mobility of the increasing population of older people?  In this section of the report, select one aspect of society that you think will be affected by the adoption of self-driving vehicles (beyond transportation and insurance) and model what you expect that change to be. In this section students should respond to the following topics:

1. What sector of society will be affected by the adoption of self-driving vehicles and what is that effect? How do you expect the sector to change? Using your model of autonomous vehicle adoption over the next 10+ years, develop a model for how you expect this change to impact the sector of society you have identified. Using as much mathematical data as you can from your previous projections and other sources, estimate these changes and demonstrate sound critical thinking and reasoning behind your projections.

Sectors of society that might be considered for this section of the report (select your own from this list or any others you are interested in):

  1. Healthcare – How will the expected change in how many human drivers are on the road impact how many people go to the hospital because of accidents?
  2. Cities or Communities – How will the change in car ownership affect how many parking spaces or parking garages are needed in the community? How will this impact public spaces?
  3. Crime – Will changes in car ownership, or driving patterns impact auto-theft or other crimes?
  4. Careers – Could adoption of self-driving cars change the distance people are willing to commute? How would this impact their careers or living situations?
  5. Data & Communications - With the added time available to people during commutes when they are not driving, will they spend more time on communications, will they use and produce more or new online data, or have other impacts on the communications industry? Will advertisements be delivered to people differently due to these changes?
  6. Others – Select your own sector of society, think of how it could be affected by autonomous vehicles and use your mathematical models to project what that effect will be.

2. Planning for Change: What are the potential positive and negative effects of these expected changes? Are there ways that we as a society or community can plan for these changes and help maximize the positive impacts and minimize the negative ones? Can we understand and plan for any risks or challenges that may be created through the adoption of autonomous vehicles?

For Part 3 of your report, you may want to start your research here: https://www.mtfchallenge.org/resources/societal-impact-data/