The multi-billion pound motor insurance industry faces a period of radical restructuring as a result of the advent of autonomously driving cars according to research carried out by Swiss Re.
Research by Swiss Re and HERE released earlier this month calculated that Autonomous Drive technologies could wipe USD20bn off insurance premiums globally by 2020 alone. At present, motor insurance generates 42 per cent of all non-life gross premiums, the largest single slice of global insurance premiums.
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Volvo Cars says it believes that the insurance industry will have no choice but to react to these seismic challenges to its existing business model.
“The medium to long term impact on the insurance industry is likely to be significant. But let’s not forget the real reason for this – fewer accidents, fewer injuries, fewer fatalities. Autonomous drive technology is the single most important advance in automotive safety to be seen in recent years,” Hakan Samuelsson, president and chief executive will tell a seminar to be held later today in London entitled ‘A Future with Autonomous Driving Cars – Implications for the Insurance Industry’.
Peter Shaw, chief executive at Thatcham Research, said: “Vehicle manufacturers are predicting that highly autonomous vehicles, capable of allowing the driver to drop ‘out of the loop’ for certain sections of their journey, will be available from around 2021. Without doubt, crash frequency will also dramatically reduce. We’ve already seen this with the adoption of Autonomous Emergency Braking (AEB) on many new cars. Research in the US by NHTSA predicts that by 2035, as a result of autonomous and connected cars, crashes will be reduced by 80 per cent. Additionally, if a crash unfortunately can’t be avoided, then the impact speed will also drop as a result of the system’s performance – reducing the severity of the crash.”
Report – The future of motor insurance – How in-car connectivity and ADAS are impacting the market – Swiss Re/HERE, 2016
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