One of the benefits of autonomous or self-driving cars that both automakers and regulators frequently tout is the potential to reduce accidents and fatalities – self-driving cars are able to make better decisions faster in order to avoid collisions.
The technology still has a long way to go – a fatality in Arizona caused by one of Uber’s driverless Volvos was the result of a system failure – but drivers are interested in how these new safety capabilities could affect their insurance premiums. According to a survey conducted by J.D. Power’s Property and Casualty Insurance Industry practice, 40 percent of consumers are willing to switch carriers if they get an autonomous discount. Nearly 70 percent of consumers expect insurance carriers to offer such discounts for self-driving cars.
According to Tom Super, director of the property and casualty insurance practice at J.D. Power, insurers are not prepared for the impact of automation right now. Many OEMs already offer partial automation technologies like lane departure, but many drivers (75 percent according to the survey) don’t have them yet. As a result, insurers may be caught flat-footed as more of these technologies are adopted.
Health Insurance Insights |
|
|
Health insurance is a struggle for many small businesses – repair shops included. But with a look at how being a part of a larger group could help your shop, you can overcome the struggle. |
|
|
“Most do not offer incentives for customers who buy those features. There’s a lack of linkage between claims and product development,” Super says.
Some carriers, however, are taking a more active approach so they aren’t caught off guard the same way they were when ride-sharing services began to take off. “Smart carriers are actively investing in these capabilities through their venture capital divisions,” Super says. “They hope to get on the potential upside of the revenues, and also to corner the market on the intellectual property that’s emerging. They are also forming partnerships.”
The top three factors that would lead consumers to purchase an autonomous vehicle ware fewer accidents (26 percent), less stress (24 percent) and lower insurance premiums (15 percent).
When an automated vehicles accident does occur, nearly 40 percent of consumers said that driers would have some responsibility, while 22 percent said that OEMs or manufactures of the sensor technology should take the blame.
There is some fear in the repair industry that the increasing use of sensors and other technology on the vehicles could result in both fewer collisions as well as more total losses of vehicles that do have a collision. Super says the general thinking across the industry is that the technology will decrease accident frequency, the cost issue may not be as important.
“What is interesting is that in speaking with OEMs, I’m being told that people are drastically overestimating the cost of these technologies that are being built in to cars,” Super says. “It is still open for debate whether or not these technologies will have a dramatic impact on the cost of replacement or repair.”
The data generated by these systems can also help insurers better evaluate risk and adjust premiums accordingly. A separate J.D. Power study found that 74 percent of consumers said they were willing to share autonomous vehicle data after a collision.
“Insurers will get much more insight into driving behaviors that are predictive, and that will help them get better at underwriting,” Super says. “One of the major drivers of usage-based insurance and semi-autonomous vehicles will be the increasing trend toward bending the risk curve, sot hey can pursue segments of the market that are much more attractive from an underwriting perspective.”
