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.
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“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.”