Bloomberg Businessweek reports insurers could see ‘significant’ drop in premium revenue as autonomous cars reduce motor vehicle accidents by up to 90%
I’ve previously written that I would be happy to find another line of work. I work as an attorney and my practice focuses on helping people injured in motor vehicle accidents. If one day the number of auto accidents drops so low because of autonomous vehicles that I become obsolete, I would be very happy with no longer being an injury attorney.
It would be a world where tens of thousands of lives would be saved every year. I can find another job.
But autonomous cars and Google cars aren’t just going to impact personal injury attorneys. They may completely change the auto insurance industry.
I just hope the auto insurance industry is as open to change as I am.
Based on the predictions made in a recent Bloomberg Businessweek article, it appears the auto insurance industry may have little choice.
Writer Alyssa Abkowitz, in her article, “Do Self-Driving Cars Spell Doom for Auto Insurers?,” reports the following prediction made in a Randy Corp. study:
“If automated vehicles succeed in reducing the risk of crashes, the industry could see a ‘significant reduction in insurance premiums.’”
Abkowitz observes that, given that “[h]uman error accounts for 90 percent of road accidents,” “the removal of fallible human drivers might create havoc for auto insurers” that rake in $157 billion annually in premiums.
In terms of writing auto insurance for driverless cars, Abkowitz notes that underwriters may end up focusing less on driving records and more on the following factors:
- Make and model of the car and
- “Black box” data.
As for liability in the event of a driverless car crash, I thought it was interesting and quite significant that Rand Corp.’s was predicting:
“[I]ncreased liability for auto manufacturers while personal liability plummets.”
For more about car-crash liability in accidents involving autonomous vehicles, check out our blog post, “Driverless cars: Who’s liable in an accident?”