Driverless Cars Are Going to Kill Insurance Companies

[jeffrey]

Driverless cars are coming, sometime. They’re going to be safer and more reliable than traditional cars and they’re going to make Google and several other manufacturers very, very rich. The only wreckage they’re going to leave behind is going to be the corpses of the scores of companies who make a killing on car accidents.

It’s no secret that computers are already much better drivers than humans. They don’t drive drunk, they don’t text, they don’t forget where they’re going or daydream. They might not reduce accidents by as much as 90 percent, as Google has suggested, but once driverless cars get any sort of real market share, the roads are definitely going to be safer.

“The immediate losers are the people who depend on accidents for their businesses,” Chunka Mui, a business consultant and author said at a Council on Foreign Relations discussion on the economic future of driverless cars Wednesday...

http://motherboard.vice.com/read/driverless-cars-are-going-to-kill-insurance-companies

[ua_guy]

THe article makes some really bold assumptions, some which I believe to be mostly untrue even in the long run.

IT's written into law that drivers must carry liability insurance. Do you really think insurance companies are going to reduce premiums just because a vehicle can be driven autonomously? Probably not, so suddenly their automotive P&C lines become profitable. I'm fairly certain that the laws regarding carrying insurance will never change, and there are many corporate sponsors of those laws.

It's also likely that there will be a very long transition period of having autonomous and manually-operated vehicles on the road together. Beyond that, autonomous vehicles will probably have the ability to be manually operated as well. Still lots of chance for collisions, drunk drivers to terrorize the roads, etc.

Health insurers will profit -- fewer injuries, less payout. But providers will suffer less revenue from fewer patients, especially chiropractors and physical therapists, EMT/basic transport companies, and the ED lines of major hospitals.

I do agree on some of the other businesses though. Collision repair shops and OE and Aftermarket parts suppliers will probably crump once more than 75% of vehicles are autonomous.

Food for thought.