Story image

Self-driving cars: Great for safety, but they'll lose the insurance industry $20 billion

13 Jun 16

The new self-driving cars will be good for road safety, but they'll also hurt the vehicle insurance industry, with research suggesting that it could cut US$20 billion from insurance premiums worldwide by 2020.

The research, conducted by US companies 'Swiss Re' and 'Here', found that the number of crashes will drop by 80% by 2035, which will dramatically cut into insurance revenue. That revenue accounts for 42% of all US non life gross premiums, the largest single slice of global premiums.

Coby Duggan, Volvo New Zealand national manager, says that both insurance companies and vehicle manufacturers have to adapt or die from the new autonomous driving (AD) technologies.

“The medium to long term impact on the insurance industry is likely to be significant. Autonomous driving technology is the single most important advance in automotive safety to be seen in recent years. It will mean fewer accidents, fewer injuries, fewer fatalities and fewer costs for vehicle owners,” Duggan says.

Peter Shaw, Thatcham Research chief executive, says the development of highly AD technology will eventually be able to let drivers drop 'out of the loop' for certain parts of the journey as early as 2021.

“Without doubt, crash frequency will also dramatically reduce. We’ve already seen this with the adoption of Autonomous Emergency Braking (AEB) on many new cars. Research predicts that by 2035, as a result of autonomous and connected cars, crashes will be reduced by 80 per cent. Additionally, if a crash unfortunately can’t be avoided, then the impact speed will also drop as a result of the system’s performance - reducing the severity of the crash,” Shaw says.

Duggan sees the benefits of AD technology, and says Volvo is committed to developing AD initiatives in the UK, Sweden and eventually China.

“The introduction of autonomous driving represents a revolution for automotive safety. Volvo has a vision that no one will be killed or seriously injured in a new Volvo by 2020. Autonomous drive technology is a key tool in helping us achieve this aim,” Duggan says.

Report finds GCSB in compliance with NZ rights
The Inspector-General has given the GCSB its compliance tick of approval for the fourth year in a row.
Preparing for e-invoicing requirements
The New Zealand and Australian governments are working on a joint approach to create trans-Tasman standards to e-invoicing that’ll make it easier for businesses in both countries work with each other and across the globe
5c more per share: Trade Me bidding war heats up
Another bidder has entered the bidding arena as the potential sale of Trade Me kicks up a notch.
Hootsuite's five social trends marketers should take note of
These trends should keep marketers, customer experience leaders, social media professionals and executives awake at night.
Company-X celebrates ranking on Deloitte's Fast 500 Asia Pacific
Hamilton-based software firm Company-X has landed a spot on Deloitte Technology’s Fast 500 Asia Pacific 2018 ranking - for the second year in a row.
Entrepreneur reactivates business engagement in AU Super funds
10 million workers leave it up to employers to choose their Super fund for them – and the majority of employers are just as passive and unengaged at putting that fund to work.
Tether: The Kiwi startup fighting back against cold, damp homes
“Mould and mildew are the new asbestos. But unlike asbestos, detecting the presence – or conditions that encourage growth – of mould and mildew is nearly impossible."
Capitalising on exponential IT
"Exponential IT must be a way of life, not just an endpoint."