Warren Buffett Thinks Self Driving Cars are Terrible for Insurance
When you are looking for investment advice or thoughts of the future, you can’t be wrong to seek the advice of Warren Buffett. Head of Berkshire Hathaway, Buffett is one of the richest people in the United States, and is known for his successful investments. When asked about the future of the insurance industry, specifically car insurance, he sees one major roadblock in its future. This roadblock actually moves quite well, and goes by the name of self-driving cars.
That’s right, the next big threat to the car insurance industry will probably come from autonomous cars, according to Buffett. The investor told CNBC that safer cars will drive down car insurance costs, and make insuring vehicles much less lucrative than it is now. That’s great for people on the road and in the cars, because they face a lesser chance of being injured or inconvenienced by an accident, for sure. Buffett foresees that the cost of insurance for cars will drop dramatically, which will cut down on the funds available to giants like Geico and Allstate.
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Before anyone in the car insurance business gets nervous, they should know that Buffett does not see this as a roadblock headed towards us quickly. The slow pace at which these cars and autonomous technology will dominate the roadway is a major reason, as old cars will either need time to be phased out or updated, and that’s even before we discuss if every American will be able to afford autonomous drive technology. If you work in the insurance agency, now would be the time to prepare, but do not start packing up any offices quite yet.
News Source: CNBC