Published: July 14, 2016 | London, UK
According to a new report published by ABI Research, while the advent of autonomous driving threatens to negatively impact the automotive insurance market, it can also innovate. Autonomous technologies present opportunities for new insurance services, particularly in relation to Usage Based Insurance (UBI). A number of vendors already partnered with OEMs to enable UBI as an embedded service, for example Progressive (GM), State Farm (Ford) and Allianz (BMW). ADAS sensors represent the key to a more comprehensive form of UBI.
James Hodgson, Industry Analyst at ABI Research, said:
Obstacle detection and collision avoidance will be the defining characteristics of autonomous technology across the entire spectrum of vehicle autonomy, stretching from today’s ADAS through to the driverless cars of the future. Therefore, the cars on our roads are only going to get increasingly better at preventing accidents and reducing insurance claims. The automotive insurance industry is highly cautious, bordering on intransigent. Many insurance vendors seem to be adopting a ‘head in the sand’ approach, emphasizing that driverless cars are decades away from being mainstream. But the technologies that will eventually enable fully driverless operation are finding their way into today’s car models. For Tesla owners, significantly changing the functionality of their vehicle OTA is no abstract concept. Insurance vendors must consider how they can best exploit the inevitable growth of autonomous technologies to stay relevant.
Recent reports suggest that automatic emergency braking (AEB) has the potential to reduce front-to-rear collisions by about 40%, with vehicles fitted with AEB affording their users a discount of around 10%. And the European New Car Assessment Programme (Euro NCAP) is formulating new testing procedures to help develop lateral ADAS, which is more effective than the current technology. Given that automotive insurance accounted for 42% of the entire general insurance industry in 2015, this trend is not one that insurers cannot afford to overlook.
Further opportunity comes from risks associated with the supporting technologies for autonomous technology, particularly as they relate to cybersecurity. Autonomous driving will have a profound effect on how mobility is consumed, with the transition from car ownership to ride sharing opening up new opportunities for specialists in product insurance.
Source: ABI Research