By: Luke Jones, Published on December 20, 2017 07:10 AM, Last Update on January 2, 2018 04:11 AM
Auto insurance providers do have the ability to adapt to autonomous vehicles despite the disruptive nature of the technology, according to two industry experts.
Accenture and the Stevens Institute of Technology carried out research that predicts 23 million fully autonomous vehicles will be on US highways by 2035. This number will be against 250 million total cars and trucks registered in the country by then.
Autonomous vehicles come in several classes, ranging from basic in-car abilities to full autonomy where the vehicle performs all tasks:
While higher SAE levels are not expected for years (SAE Level 5 is over a decade away), the RAND Corporation report found that at just 10% better (Improve10) than current abilities, autonomous vehicles could save thousands of lives per year in the United States alone. This number could increase to hundreds of thousands over coming decades, even if the technology does not improve more than 10%. The company argues this is better than simply waiting for driverless vehicles to get 75% (Improve75) to 90% (Improve90) better.
However, autonomous vehicles are a major disruptor for the auto insurance industry, and the Accenture/Stephens University study suggests company-owned ride-sharing vehicles will become the norm. An obvious problem for insurers would be if tech companies and automakers started creating their own insurance solutions.
“We believe that most fully autonomous vehicles will not be owned by individuals, but by auto manufacturers such as General Motors, by technology companies such as Google and Apple, and by other service providers such as ride-sharing services,” said Accenture executives John Cusano and Michael Costonis.
By acting now, insurers can prepare for autonomous vehicles and thrive when the technology matures to full autonomoy. The research suggested four key steps that insurers can take now in preparation for the technology:
“Change is inevitable for auto insurers, but the change can be positive,” Cusano and Costonis concluded. “Insurers that vigorously pursue the short- and medium-term opportunities presented by cyber insurance, product liability insurance, and infrastructure insurance – while making careful strategic decisions about their partner ecosystems, operating models, and value propositions – are most likely to thrive in a driverless environment.”