My Finances Today — There has been recent discussion that driverless cars could disrupt the insurance industry, but this concern is premature.
Autonomous vehicles aren’t going mainstream anytime soon. Too many issues remain, including standardizing the behavior of these cars and determining who would be liable in accidents.
What will disrupt the insurance industry in the near term is the increasing application of driverless car technology to traditional vehicles. This is what insurers and investors should be worried about right now.
These technologies could reduce accident claims dramatically. As the Los Angeles Times reported late last year, automakers are now making autonomous technologies standard offerings in autos.
They include monitoring of drivers’ blind spots, warnings about unsafe drifting and seat vibrations that alert drivers that objects are too close. Emergency braking systems are also finding their way into traditional autos. There are also technologies that use sonar, radar and GPS to determine that a crash is imminent.
The automatic emergency braking system alone could reduce accidents by 45%, according to an article in The Telegraph.
Volkswagen (VLKAY), Hyundai Motor (HYMLF), Honda Motor (HMC) and Fiat Chrysler (FCAU) are among the automakers that are already offering autonomous technologies in their cars.
These technologies are bound to reduce accident rates in the near term. Matthew Avery, an auto safety researcher, was quoted by The Telegraph as saying that many commentators predict these technologies will reduce by 80% the number of people killed or injured on U.K. roads.
Let’s consider the infographic below to point out the easiest way these technologies could change the insurance industry.
Source: Buy Auto Insurance
