Driverless Cars to Slash Auto Insurance Premiums 80%?

Brian Anderson

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Elon Musk (Tesla) tweeted about this Wall Street Journal article, proclaiming insurance premiums expected to decline by 80% due to driverless cars…

The insurance industry has a $160 billion blind spot: the driverless car.
Car insurers last year hauled in $200 billion of premiums, about a third of all premiums collected by the property-casualty industry. But as much as 80% of the intake could evaporate in coming decades, say some consultants, assuming crucial breakthroughs in driverless technology make driving safer and propel big changes in car ownership.

For the actuaries who set insurance rates, it is a puzzle like no other: How do they prepare for a world of so many fewer auto accidents? In the future, will underwriters be insuring drivers or computer code?


I know - still years away - but an interesting question nonetheless.

Driverless Cars Threaten to Crash Insurers
 
I honestly can't see this happening in the next 15-20 years. The reason is due to the upper class may afford this luxury but there will still be manual driven cars by people who can't afford the new norm. Maybe beyond 20 years from now but it sound very far fetched but I guess we will see. The combination of Internet insurers and these self driven automobiles definitely will be a problem in the future for sure.
 
Elon Musk (Tesla) tweeted about this Wall Street Journal article, proclaiming insurance premiums expected to decline by 80% due to driverless cars…

The insurance industry has a $160 billion blind spot: the driverless car.
Car insurers last year hauled in $200 billion of premiums, about a third of all premiums collected by the property-casualty industry. But as much as 80% of the intake could evaporate in coming decades, say some consultants, assuming crucial breakthroughs in driverless technology make driving safer and propel big changes in car ownership.

For the actuaries who set insurance rates, it is a puzzle like no other: How do they prepare for a world of so many fewer auto accidents? In the future, will underwriters be insuring drivers or computer code?

I know - still years away - but an interesting question nonetheless.

Driverless Cars Threaten to Crash Insurers

I know zero about P&C insurance but for those who do:

Although the instances might be few and far between, isn't the liability much higher?

So instead of trying to sue someone who had minimum coverage and is dirt poor (blood from a stone) due to an accident that they caused, I get to sue a multi-billion dollar corporation?

How would that affect premiums?
 
I don't see it being 20 years out before it starts effecting rate. Ford, Volvo, Tesla, Mercedes, GM, BMW, Toyota and more have all said they believe they will have at least level 3 out of 4 self driving cars by 2021. that's less than 5 years from now. Ford announced today they believe their vehicle will be level 4 (no steering wheel gas or brake pedals by 2021) and Tesla believes that same thing. Model 3 is $35K and I'm sure Fords car will be competitive with that. This is not some future persons problem. This will directly effect personal P&C industry in a HUGE way.
 
Elon Musk (Tesla) tweeted about this Wall Street Journal article, proclaiming insurance premiums expected to decline by 80% due to driverless cars… The insurance industry has a $160 billion blind spot: the driverless car. Car insurers last year hauled in $200 billion of premiums, about a third of all premiums collected by the property-casualty industry. But as much as 80% of the intake could evaporate in coming decades, say some consultants, assuming crucial breakthroughs in driverless technology make driving safer and propel big changes in car ownership. For the actuaries who set insurance rates, it is a puzzle like no other: How do they prepare for a world of so many fewer auto accidents? In the future, will underwriters be insuring drivers or computer code? I know - still years away - but an interesting question nonetheless. Driverless Cars Threaten to Crash Insurers

So... When someone post that the sky is falling, I'm always the one that says y'all are full of crap! Then I get post beating me up. Then, like Google, I'm proven correct.

Well- this time there is some merit to the stories. Uber just bought Otto for $668 million. Otto will have driverless simitrucks on the road in 2-3 years.. Über' bought them so they could soon be driverless. Lift & GM are also very close.

If timelines hold, these could start changing our landscape in about 5 years. In 10 years you will make more off a preferred flood policy that an auto policy.

My plan is to ride the auto wave for the next 5 years while transitioning into more commercial & life insurance.

In other words, we are about to loose the auto market. However, the good news is maybe that GD lizard will finally dry up and die! Flo will also finally loose her job.
 
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