It feels like a page out of a science-fiction book: self-driving cars shuttling people around with little or no input from passengers. And yet, here we are. Experts predict that self-driving vehicles could be the norm by the s. Major changes are coming to the automotive industry, and the insurance industry will consequently see its own major changes as well. Self-driving cars raise complex questions for insurers, and answering those questions will take time. Experts are already weighing in, though.
Can you picture the day when your car insurance bill drops every month?
Experts agree that self-driving cars present the auto insurance industry with major challenges, but also with significant near-term opportunities.
This could very well happen as self-driving car manufacturers SDCMs take over the car insurance business. As a consequence, they are likely to be conservative and set high initial costs for insuring autonomous vehicles.
By contrast, SDCMs will have the next best thing to real-life statistics -- they have data centers full of data not only about accidents but also about near misses albeit for their own cars only.
This means they can generate accurate statistics about accidents of their own cars as often as they want and thus estimate the cost to insure their cars. An SDCM will be able to turn a barrier to adoption into a potential sale.
Self-driving cars raise complex questions for insurers, and answering those questions will take time. Experts are already weighing in, though. Experts vary as to when the changeover to self-driving cars will occur. voluntary guidelines for companies developing self-driving cars. A version of this article appeared in the Spring issue of strategy+business. If you are an executive of an auto insurance company, pay.
Furthermore, by offering car insurance themselves, the self-driving car manufacturers not only remove a barrier to adoption to their product but they also project confidence in their product. Even better, pricing for car insurance will be greatly simplified since the most important variable in the pricing equations -- the human -- will be taken out of the system. The price of insurance will be determined by the hardware and software installed in the car -- not by the human driver.
From policy prices to insurers' relationships with auto manufacturers, to prevent accidents will clearly push down self-driving car insurance. Auto companies hope to significantly decrease this number as we inch If 2 self- driving cars get into an accident, whose insurance covers the. Autonomous vehicles could increase premiums and disrupt the bottom line for insurance companies.
Since they will have actual real-time data on accidents and fatalities, SDCMs will radically drive down the cost of car insurance and make car ownership more affordable, thus expanding their market. Furthermore, reducing accidents is one of their primary business drivers to increase adoption.
Today's incumbent car insurance companies do not have statistical tables for accidents and fatalities for self-driving cars since self-driving cars. Without humans to cause accidents, 90% of risk is removed. Insurers are scrambling to prepare. Rick Huckstep talks with insurance industry expert David Williams And today's news of an Uber self-driving car involved in a fatal accident.
Will car manufacturers provide insurance? Also in Future of Insurance Reader's favourite.
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