Self-driving cars could cause insurance cost downshift

Even if uptake for autonomous vehicles is slow, insurance premiums could be reduced by 40%

Insurance News

By Gabriel Olano

According to data from international insurer Aon, one major benefit of autonomous vehicles could be lowered premiums for motor insurance, with a possible decrease of 40% by 2050.
The Global Insurance Market Opportunities Report, published by the broker, states that even if the uptake is slow, there could be enough self-driving cars in the US by 2035 to reduce insurance premiums by 20% compared to current prices. If self-driving cars become commonplace, the insurer expects buying cover could be 40% cheaper by 2050.
Paul Mang, CEO of Aon Analytics, said: “Adoption of autonomous vehicles will of course be affected by many variables such as regulatory challenges, cost to the consumer, safety, vehicle ownership preferences, and the technology itself. However, we as an industry need to act quickly to ensure that we have the products available to align to the new paradigm; if we fail to do so, we only invite disruption.”
The data predicts that there could be an 81% drop in auto insurance claims once self-driving cars become mainstream. However, these could be offset by maintenance costs, as radar and laser sensors are very expensive to replace.
In Asia, Singapore-based nuTonomy has launched a limited public trial of its autonomous taxi service, with a full launch planned for 2018.
Tesla, the electric car manufacturer, is also dabbling in self-driving vehicles. It partnered with QBE Insurance in Australia and AXA General Insurance in Hong Kong to create customized insurance plans for the vehicles it manufactures.

Related stories:
First, it makes semi-autonomous cars. Now? It’s offering to insure those vehicles
Driverless cabs being tested on Singapore roads
Uber’s first self-driving fleet to launch this month

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