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Report Shows Self-Driving Cars Will Change the Automotive Insurance Industry

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Photo: General Physics Laboratory (GPL) vis Flickr

Self-driving cars could completely change the face of the automotive industry
Photo: General Physics Laboratory (GPL) vis Flickr

As the automotive industry moves forward, there is no longer a question as to whether or not there will be self-driving cars in its future. Now, it’s more of a question as to when these vehicles will appear on the market and how it will affect the industry as a whole.

Once autonomous vehicles become a reality, there’s no doubt that it is going to change the automotive industry forever—but it’s also going to seriously affect the multi-billion-dollar insurance industry as well.

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When self-driving technology is finally introduced, drivers will be handing over the wheel to a series of computers. As these computers take over the everyday driving tasks, the number of crashes is expected to drop by 80% by 2035. As if that wasn’t already good enough news, this decrease in automotive accidents means that insurance premiums are sure to drop as well.

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According to a recent report completed by Swiss Re and HERE Maps, autonomous driving technology could potentially take $20 billion from insurance premiums by 2020 and that amount will steadily increase as the years go by. Many industry experts believe that the insurance industry will have to restructure itself in order to stay solvent.

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“Vehicle manufacturers are predicting that highly autonomous vehicles, capable of allowing the driver to drop ‘out of the loop’ for certain sections of their journey, will be available from around 2021,” said Peter Shaw, chief executive at Thatcham Research. “Without a doubt, crash frequency will also dramatically reduce. We’ve already seen this with the adoption of Autonomous Emergency Braking (AEB) on many new cars. Additionally, if a crash unfortunately can’t be avoided, then the impact speed will also drop as a result of the system’s performance—reducing the severity of the crash.”

So, it looks like autonomous driving technology is good for more than just keeping everyone out on the road safe—it’s going to keep your wallet a little fuller, too.

News Source: Digital Trends; Swiss Re and HERE Maps