Driverless cars could spell disruption for unprepared insurers as motor insurance premiums fall

Tracey Boles
A driverless car (Source: Getty)

INSURERS need to prepare for the potential disruption – and opportunities – arising from driverless cars according to Aon Benfield, the global reinsurance intermediary of insurance giant Aon.

“Adoption of autonomous vehicles will of course be affected by many variables such as regulatory challenges, cost to the consumer, safety, vehicle ownership preferences, and the technology itself. However, we as an industry need to act quickly to ensure that we have the products available to align to the new paradigm; if we fail to do so, we only invite disruption,” said Paul Mang, CEO of Aon Analytics.

The report, Riding the Innovation Wave, forecasts that if autonomous vehicle technology is adopted at even a moderate pace, US motor premiums could decrease by 20 per cent by 2035 compared to their 2015 levels, and potentially by more than 40 per cent by the time that autonomous vehicles reach full adoption in 2050.

Personal motor accounts for 47 per cent of global insurance premiums.

In the same report, Aon Benfield forecasts that by 2020 the global market for cyber premiums could reach $10bn.