Auto Insurers, Buckle Up — Automated Tech Is Already Here
Many auto insurers have developed a false sense of security based on a belief that vehicles with automated driving technology are still several years off, but recent events have demonstrated that the public is buying and driving cars that have a high degree of automation. Auto insurers, whose business models are based on relatively thin profit margins predicated on a fairly high level of predictable loss experience are not prepared for substantial disruptions such as significant and everlasting change in our transportation system. Concepts like “autonomous vehicles” taking over our highways challenge the long-held concepts that auto insurer models are built on. Many consulting organizations project dramatic reductions in accident frequencies and severities. As a result it is important for those involved in the auto insurance industry to understand and appreciate the risks associated with this new technology as it develops.
