Insurance providers should get behind initiatives to promote autonomous cars. It would be good for their businesses and also good for their customers.
The rise of autonomous cars is one of the biggest disruptive forces confronting the insurance industry. It’s challenging auto insurance providers to rethink traditional approaches to liability, risk assessment and costing.
Many of the changes autonomous cars will bring to the insurance industry are as yet unclear. When will autonomous cars become commonplace on our roads? How will national and local laws regulate these vehicles? Who will own autonomous cars and who will be responsible for them while they’re on the roads? Who will have access to the data generated by them and how will it be distributed and protected? Will the public readily accept these vehicles or will there be strong resistance from drivers and passengers?
Such uncertainty is bound to make insurers uneasy. Many are understandably concerned that the emergence of autonomous cars will deplete their current revenue streams. However, I’d like to present an alternative view.
Insurance providers, I believe, should start working closely with the developers of autonomous cars as well as with associated research organizations and technology suppliers. They should also co-operate with national and local transport regulators.
It’s important that insurers not only keep up to speed with developments in the autonomous car business. I believe they would also benefit from putting themselves in a position where they can help enable and steer its progress. They can’t do this if they’re not involved.
Participation in the emerging autonomous car industry is important for two key reasons:
- It’s good for business. The arrival of autonomous cars may well put the brakes on some traditional insurance activities – the number of auto insurance policy-holders is likely to fall and premiums will probably slide. However, plenty of new opportunities will appear. They include risk-management services for fleet owners and civic authorities, ecosystem alliances with vehicle manufacturers, and connected-insurance solutions that integrate data sourced from cars, homes and wearables.
- It’s good for customers. Amidst the excitement and confusion caused by the prospect of legions of autonomous cars travelling along our roads, it’s easy to overlook one of the biggest drivers of this transport revolution – safety. By helping to accelerate the introduction of autonomous cars, insurers would help save lives. There’ll be far fewer accidents on our roads.
The recent death of the driver of a Tesla sedan that collided with a truck while the car was apparently on “auto-pilot” is a tragic reminder that road transport will never be completely without risk. However, several studies, including research by the Eno Center for Transport, indicate that autonomous cars are much safer than conventional vehicles. More autonomous cars on our roads would also reduce traffic congestion, fuel consumption and air pollution.
I believe insurers should embrace the autonomous car revolution. It’s going to gather pace whether they back it or not. Getting on board early will enable them to broaden their businesses and enhance the wellbeing of their customers. That has to be good news.