As a big promoter of the autonomous trend, Volvo says the upcoming driverless technologies are forcing the multi-billion-dollar motor insurance industry to face a period of radical restructuring.
There are increasingly more studies showing that self-driving cars will definitely upset the insurance industry. Volvo, one of the most active advocates within the auto world on pushing this technology upfront, also believes that insurers have to make radical changes in their business, as the number of crashes are being forecasted to drop by 80 percent by 2035 and insurance premiums are set to plummet. The Swedish brand points out a research made by Swiss Re and HERE in which they calculated that self-driving technologies could wipe out 20 billion dollars off insurance premiums globally by 2020 alone. The study says this trimming would be greater were it not for global car sales growth, mainly fuelled by growth in emerging Asia, in China and India in particular, which will become the largest markets for motor insurance by 2025 in terms of volume.
“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,” Hakan Samuelsson, Volvo CEO, said during a seminar held this week in London entitled “A Future with Autonomous Driving Cars – Implications for the Insurance Industry”.
The World Health Organization estimates that road traffic accidents kill 1.2 million people every year, costing economies between 1–3 percent of their gross national product, but driverless cars will have a major positive impact on that unwanted high figure. Another research made by the US NHTSA predicts that by 2035, as a result of autonomous and connected cars, crashes will be reduced by 80 percent. Furthermore, if a crash cannot be avoided, then the impact speed will also drop as a result of the smart safety systems, thus reducing the severity of accidents.