2017, March

How Driverless Cars are Changing the Auto Insurance Industry
(0) How Driverless Cars are Changing the Auto Insurance Industry

Elon Musk, CEO of Tesla, has made his position clear that if one of their self-driving cars has an accident, Tesla will not be liable and it will be up to the individual’s insurance unless the accident was the result of a design flaw. Volvo, Google and Mercedes Benz, on the other hand, have all stated that they would accept full responsibility. The real question is, how will insurance companies assess liability between the manufacturer and the driver, or will they hold both parties accountable?

Autonomous vehicles are loaded with safety features and crash avoidance systems, making self-driving vehicles much safer overall. But accidents will happen, no matter how safe the design. The question of who – or what – is liable will still depend on the individual factors that resulted in the accident. Regardless of what Elon Musk thinks, manufacturers and software designers will definitely be liable to some extent in many cases. Self-driving vehicles continue to have problems adapting to bad weather and fast-changing road conditions, and liability for accidents occurring in autonomous mode under these conditions would land squarely on the shoulders of the car company. But one big advantage the car companies have is this: testing has consistently shown computers to be safer drivers than humans. So it is logical to assume that under normal conditions autonomous vehicles will have fewer accidents than human-operated vehicles.

The UK Government’s draft vehicle technology bill suggests that the car manufacturers, not the individual behind the wheel, should be held liable. The bill also suggests that insurers offer policies for both fully autonomous and semi-autonomous operation of vehicles. Insurance coverage would be void if the driver makes unauthorized changes to the software or fails to keep the software updated.

Adrian Flux was the first UK insurer to provide driverless car insurance. The policy is dependent on a licensed driver being in the vehicle and able to take control at any time, and can be invalidated if the owner fails to properly maintain the vehicle, including timely downloading all updates to the software. The driver would be liable under UK law if he/she is under the influence of drugs or alcohol, is texting or otherwise distracted, or if the vehicle is exceeding posted speed limits.

Adrian Flux’ website also outlines the following interesting points:

The UK’s road’s minister, Andrew Jones recently outlined how the insurance industry will adapt to the introduction of driverless cars and the question of liability by saying, “…in the event of a serious collision in driverless mode, it would be the vehicle at fault, instead of the human driver.”

The National Highway Traffic Safety Administration in the US also, for example, considers Google’s autonomous driving software can be identified as the driver.  How this interpretation of liability will work with the State of California’s ruling requiring a fully licensed driver to be present in the car is still unclear. If there’s no steering wheel in the car, as Google is planning, why would a human occupant need a driving licence or car insurance?

That last paragraph raises the issue of who is considered the “driver”. If the car / software is held to be the “driver” under the law, then the auto maker must be held responsible to a large degree. A number of insurance industry analysts have said that this crosses over into product liability rather than personal insurance. If the technology malfunctions or if the car fails to respond as it was intended to, this is clearly a product liability claim and the auto maker’s insurance would and should pay for damages.

Here's an interesting to consider question: if the law requires a driver to hold a valid driver’s license to operate a vehicle, will it not then be necessary to institute a series of driving tests that the car must pass before it can drive itself?

The insurance industry will continue to adapt and adjust as the driverless car industry evolves and as the pattern begins to emerge over time as to the types of accidents occurring, the number of claims processed and the quantum of damages paid out. While improvements to safety systems have lowered the frequency and severity of certain types of collisions, they are also much more expensive to repair and replace. This results in higher payouts from insurance companies, which results in – you guessed it – higher insurance rates being passed on to the consumer. On the up side, though, the safer your vehicle is, the lower the rate you will get from most underwriters.

For the immediate future, it seems likely that most insurance policies will still require a licensed driver to be present in the vehicle and ready to take over in the event of an emergency. An underwriter may assess liability based on how much control the human operator had or might have had over the vehicle. If there is no means for the individual to take control, then the individual would bear no responsibility and the auto maker would be liable for the damages. Insurers and governments still have time to develop and implement laws, policies, rules and regulations before self-driving vehicles become a common sight on our streets and highways.

Image licensed by CreativeCommons.org

How to Deal With Resistance from Franchisees
(0) How to Deal With Resistance from Franchisees

It is natural for franchise support representatives to feel that if you present our ideas clearly and logically and with the best interests of Franchisees at heart, they will accept your expertise and follow your suggestions to build their business. Therefore it comes as a surprise when you find out that some Franchisees will always resist change, no matter how reasonable the recommendation.

Resistance is Futile?

At first it is natural to label the resisting person as stubborn and even irrational, and to respond by reiterating your suggestions or vehemently justifying your recommendations. But in examining the nature of resistance, it is important to understand that resistance is:

  • a reaction to an emotional state deep within the person;
  • not necessarily an evaluation of the suggestion on a logical, rational level;
  • a predictable and natural emotional reaction which serves to protect the individual against stressful situations;
  • often a necessary phase of the learning process.

It is only natural that the Support Representative would wish that resistance on the part of the Franchisee would simply disappear, for on one level it makes your task that much more difficult. But don't turn into Locutus of Borg - resistance is not futile. In fact, it can serve a valuable purpose as a learning tool. Countering the objections of a Franchisee and working through an issue with him/her can be a tremendous stimulus to growth – both on their part as business people and for the relationship as a whole. For true learning to occur, it is necessary that all feelings of resistance on the part of a Franchisee will have to be expressed directly, before he/she can accept and use your counsel.

Dealing with Resistance

Key skills required to deal with resistance are:

  • the ability to identify the signs;
  • being able to view resistance as natural, that it is a sign that the learning process has begun;
  • supporting the Franchisee in expressing all of his/her feelings and objections;
  • not internalizing the resistance or seeing it as a personal attack.

Forms of Resistance

Resistance can take many forms. Here are some of the most common.

  1. The Franchisee persists in wanting more information. No matter how much is given, it's not enough. While some of the questions will undoubtedly be reasonable, at some point it will exceed reasonable levels and you will begin to feel impatient. This reaction is a good barometer for judging when a simple need for information crosses the line to become resistance.

  2. "I need to give you more details." A corollary to item #1 is when the Franchisee insists on giving you way too much information. For instance, you may ask "How did this problem start?", and the response might be, "Well, I think it all began about five years ago on a Friday afternoon in May when… "

  3. Time pressure. The Franchisee indicates that he/she would really like to implement the suggested change, but not right now - the timing is not right, we're far too busy, we're short-staffed at present, etc.

  4. Practicality. This refers to situations when the Franchisee protests that he/she is living in the "real world" and is facing "real world pressures". The implication, of course, is that the Support Representative is not on the firing line, and is overly idealistic and impractical.

  5. Verbal attack. The most blatant form of resistance is an angry verbal attack by a Franchisee. Your response to such an attack may be either to withdraw or to respond in kind. Both of these responses indicate that you are taking the attack personally rather than seeing it as just another (though highly unpleasant) form of resistance.

  6. Confusion. When a Franchisee asks for help, he/she is likely sincerely seeking clarification. But if the Franchisee continues to claim lack of understanding after you explain the situation once or twice, the "confusion" could just be a form of resistance.

  7. Silence. The silent approach is one of the hardest for Support Representatives to deal with. You may talk to the Franchisee until you're blue in the face and be met with little response or just a passive silence. He/she may reply that he/she has no particular objection to what you're proposing – but be warned, silence doesn't mean consent. In matters important to business, a Franchisee is sure to have some response.

  8. Intellectualizing. Rather than focusing on the practical matters of implementing a change, the Franchisee may begin exploring theory after theory about why things are the way they are. This intellectualizing is actually a means of escaping the reality at hand and is a form of resistance.

  9. Moralizing. Moralizing resistance can be recognized through the use of certain key words and phrases such as "those people should", "they need to understand", etc. When you hear a Franchisee taking this tack, it is probably a defence against the reality of the change.

  10. Compliance. Beware of the Franchisee who expresses a desire to get to solutions quickly, with no need or desire to discuss problems. Likewise the Franchisee that implies "whatever you do is fine with me". While the compliant Franchisee who totally agrees with you and seems eager to know what to do next seems like the ideal situation, compliance of this sort can be one of the more difficult forms of resistance. Typically an absence of reservations is part and parcel of a "low energy agreement".

  11. Methodology. A Franchisee's persistent questioning about the methods of implementing a change can represent a legitimate need for information. But once you have established the credibility of a proposed change, repeated questions on the part of the Franchisee about implementation strategies, or suggestions of alternate methods, may be a form of resistance that will impede progress.

  12. Flight Into Health. This occurs when a proposed change is being discussed as a resolution to a problem, yet partway through the discussion it appears that the Franchisee no longer has the problem you were addressing in the first place. It has now magically disappeared, so there is no longer any reason for the change.

REMEMBER – Resistance does not actually mean "No".

Image by Herbert Bieser from Pixabay