General Insurance Article - Driverless cars to change demand for insurance


 Following the government’s announcement on the 30th July to step up trials of driverless cars on public roads, Towers Watson's Graham Fulcher commented:

 “Almost inevitably, driverless cars will change the demand for motor insurance, both in volume and in nature. Nonetheless, when it comes to existing motor insurers, the famous Mark Twain quote - “The report of my death was an exaggeration” - springs to mind.”

 “History has shown that people tend to overestimate the impact of technology on a fairly short time horizon of say five years. Equally, they also tend to extrapolate the current, leading to step-change effects being overlooked and the underestimation of the effects in a longer time window. So, as part of longer-term strategic thinking, remaining on the front foot might well require insurers to contemplate business models and potential new products that could enable them to ride along with changes in demand.”

 “For example there will be a long transition with driver and driverless cars on the road where insurance needs may actually increase. Even when, or maybe if, everything is driverless, I think there will be a big need for insurance – except the risks, frequencies and severities will all be different. The industry will now be insuring computers/technology against malfunction/failure in a liability sense as opposed to drivers getting it wrong.

 “One area most affected could be distribution. There is a potential scenario where car manufacturers might cut out insurance companies altogether, although their track record in offering insurance products in the past is not strewn with success stories.”
  

Back to Index


Similar News to this Story

The Divorce Gap as women's incomes cut in half after divorce
Women’s incomes cut in half following a split – leaving them financially vulnerable (24%) and struggling to meet the cost of essentials (19%) and this
Cyber Risk exposure for small businesses
CyberCube has released its latest report: “H1 2025 Global Threat Briefing: Understanding Cyber Risks for Small Businesses”. The report highlights the
EU comprehensive AI Act includes obligations for employers
A major European regulation imposing strict rules on AI activities that pose high and unacceptable risks, including those deployed in the workplace, i

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.