New tech could save industry $400 million

New tech could save industry $400 million | Insurance Business

New tech could save industry $400 million

The use of autonomous technology in cars could help the insurance industry save lives and money, an expert has said.

While fully autonomous cars may be making headlines the world over for the impact they will have on roads and the insurance industry, other aspects of autonomous technology that are already available could see dramatic reductions in both injuries and insurance claims.

Autonomous emergency braking (AEB) alone could see a 25% reduction in injuries and potentially a 10%-15% drop in overall insurance costs, IAG head of research, Robert McDonald believes – and this is just the beginning. 

“In Australia alone, the industry spends about $400 million on low speed breaking and reversing claims,” McDonald told Insurance Business.

“Part of that AEB, in conjunction with automatic parking, has the potential to reduce or eliminate that cost.”

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McDonald noted that as the technology becomes more widespread in vehicles of all price brackets, the technology itself becomes smarter, cheaper and more effective. This will help the insurance industry lower costs.

With further steps towards full automation, McDonald said that the insurance industry will still have a key role in the all-important motor market.

As domestic and commercial vehicles move towards automation, repair costs in the event of a crash will become more expensive, as will repairs following adverse weather or technical faults. This means that insurance will still be needed.

McDonald said that the trucking industry could be one of the first to see large scale automation on highways. City environments are proving to be more difficult for autonomous driving but technology already exists that could help the trucking industry lower costs through long-distance automation.

For brokers, autonomous upgrades in trucking could impact their businesses with lower insurance costs. However, McDonald noted that the full impact of autonomous technology on the industry could take several years to fully develop.

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