The Impact of Driverless Cars on Insurance
Most consumers say they’re not ready to get into an autonomous vehicle due to safety concerns like technology failure.
In fact, according to a new study from AAA, 63% of U.S. drivers report feeling afraid to ride in a fully self-driving vehicle.
This percentage is a significant decrease from the 78% of drivers who reported feeling afraid in early 2017.
While these vehicles have been tested relentlessly, and statistics show that 94% of accidents are due to human error instead of technological error, it’s still an uneasy feeling to leave your life in the hands of pure technology.
What will insurance policies look like in 10 years when driverless cars gain more traction?
Many predict that in a few years, most people won’t own cars. Instead, they’ll rent cars for their commute from companies like Zipcar.
Instead of owning cars and having them sit idle during the day, they’ll just be rented for a specific trip.
So, insurance policies will probably look a lot like regular auto/rental insurance, but with a few more bells and whistles.
For instance, if you leave something of yours in the ride sharing car, it’ll be covered!
Harvard Business Journal predicts that insurance companies will experience a $25 billion loss by 2026 due to autonomous cars.
Additionally, logistics companies like FedEx and UPS are likely to switch to autonomous vehicles within the next few years.
So, how can insurance companies prepare for the future?
Here are a few ways insurance companies can prepare for the future.
Invest in data and analytics
The future lies within data and analytics, so it’s important to bring experts on board and its a good investment to make.
Have a plan
Having a plan of attack before all this change happens is always a good idea. Be sure all components of your company are on the same page about the shift and that they know what to expect.
Learn everything you can about autonomous cars – become an expert. The more you know, the better off you’ll be.
Consider bringing on new people who are experts in technology, data or analytics.
Explore new business models
One thing you might consider is a new business model for your company. Autonomous cars will shake up the insurance industry. Personal automobile insurers may need to change and adapt to be able to cover larger risks with fewer policies.
Change is inevitable, but good. When it happens, make sure you’re ready. However, insurance companies can rest assured: the shift to driverless cars will be very gradual.
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