Auto Insurance Faces Big Challenges

Autonomous cars offer the promise that 20 years from now we will live in a world where cars take themselves to the gas station while we are sleeping to fill up or charge up for the next morning’s drive, where we can enjoy texting on the ride to work without totaling our car, and where getting a learner’s permit will no longer be a teenage rite of passage.

The day of the autonomous car is approaching, and while not every vehicle on the road will be without a driver once that day arrives, it is expected that by around 2035, up to one-third are likely not to have one.

While it is a scenario that every auto insurer has heard about and dreads, it is not the scenario auto insurers should really be focused on today. Instead, they need to concentrate on the artificial intelligence already making its way onto the roads because it is those advanced driver assistance systems that are about to upend accidents and claims experience in the industry’s pricing and underwriting models, long before self-driving cars make a significant impact.

Changing paradigms

The vision of the autonomous car implies a challenge to many of today’s paradigms around cars

Source: Oliver Wyman