Autonomous cars could spawn the end of the auto insurance industry? image

The Insurance Institute for Highway Safety (IIHS) in the United States has been conducting on a regular basis new tests that carefully assess at the research center in Ruckersville, Va. how good are the latest crash avoidance technologies implemented by automakers.

The auto insurance industry could face its most dire moment in the years to come, with Allstate, Geico, State Farm, and others bracing to withstand the effects of carmaker innovations and technologies that could make roads safer and in turn take away a large portion of their revenue. Automakers are slowly automating more and more parts of daily driving, in a bid to secure consumer understanding and acceptance towards the final goal – completely autonomous vehicles. Google is even swifter – its prototypes are demonstrating a future period where driverless vehicles would make do without the usual set of driving systems – so goodbye pedals and steering wheel. And as the auto industry evolves towards the anticipated future where self-driving cars would dominate the environment, accidents are forecasted to drop and owners would then feel less inclined to acquire costly insurances.

According to Donald Light, head of the North America property and casualty practice for Celent, a research firm, premium consumer coverage could plunge up to 60 percent in the next decade and a half as autonomous vehicles take to the roads. The auto insurance industry has been a cash cow for decades – last year alone it snatched $195 billion in premiums from US motorists alone. The insurance industry on its own is not against safer roads – they have been joining efforts to promote antilock brakes, airbags, and other life-saving features to be standard in every car.

Via Bloomberg