Autonomous vehicles to shrink auto insurance market by 70% by 2050

DISRUPTIVE TECH: Autonomous vehicles are set to change the insurance world, shifting the liability to manufacturers. According to research by KPMG this means that the auto insurance sector will shrink by 70% or $137 billion by 2050, up from 2015 estimates.

The updated study, The Chaotic Middle: The Autonomous Vehicle and Disruption in Automobile Insurance anticipates a shift towards new types of insurance products as technology makes cars safer, auto manufacturers assume more liability, and a shift from personal auto coverage to commercial auto insurance. The obvious change we are already seeing is on-demand transport and car-sharing rapidly expanding in dense population centers.

Cyber risk will no doubt see changes if/when driverless cars become a reality. A team of hackers took control of a Tesla Model S from 12 miles away last year. Insurance carriers are already grappling with such implications. However, according to an American Automobile Association survey 3/4 of Americans aren’t on board with self-driving cars quite yet.

Benefits include expanded mobility for the young, disabled, elderly, and carless. There are however ethical considerations like swerving to miss a truck but potentially killing a person or motorcycle. Other considerations are explored here: https://infograph.venngage.com/p/97547/autonomous-cars-infographic-group-work 

Read more: http://www.mynewmarkets.com/articles/183056/auto-insurance-market-shrink-70-2050-report