Insurance company ready to tackle driverless cars image

Progressive Corp. said its technology that tracks driver behavior to set insurance rates will help the company adapt as automated cars take the road.

The auto insurer offers a device called Snapshot, which plugs into a vehicle and monitors habits to calculate discounts for customers. As cars become more automated, underwriters designing policies could use the technology, Chief Executive Officer Glenn Renwick said today.

“It gives us some very direct insight to the vehicle,” he said during a conference call. “That gives us opportunities to think about things differently, what might be insurable.”

The development of fully autonomous vehicles could challenge auto insurers’ business, much the way that digital photography and video transformed the film-camera industry, Renwick said. Automating driving can reduce the risk of human error, which is currently the main cause of car accidents, he said.

Auto insurance will have “more to do with information that comes from the car than the classical segmentation with regard to characteristics of the driver,” Renwick said.

Prior to Snapshot, Progressive was a pioneer in using metrics such as credit scores to determine rates. The practice is now used widely in the industry. The auto insurer said in April that the monitoring device had helped it log more than 6 billion miles (10 billion kilometers) of driving data.

Via Bloomberg