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Will Autonomous Cars Be the Insurance Industry's Napster Moment?
An anonymous reader writes: Most of us are looking forward to the advent of autonomous vehicles. Not only will they free up a lot of time previously spent staring at the bumper of the car in front of you, they'll also presumably make commuting a lot safer. While that's great news for the 30,000+ people who die in traffic accidents every year in the U.S. alone, it may not be great news for insurance companies. Granted, they'll have to pay out a lot less money with the lower number of claims, but premiums will necessarily drop as well and the overall amount of money within the car insurance system will dwindle.
Analysts are warning these companies that their business is going to shrink. It will be interesting to see if they adapt to the change, or cling desperately to an outdated business model like the entertainment industry did. "One opportunity for the industry could be selling more coverage to carmakers and other companies developing the automated features for cars. ... When the technology fails, manufacturers could get stuck with big liabilities that they will want to cover by buying more insurance. There's also a potential for cars to get hacked as they become more networked."
Analysts are warning these companies that their business is going to shrink. It will be interesting to see if they adapt to the change, or cling desperately to an outdated business model like the entertainment industry did. "One opportunity for the industry could be selling more coverage to carmakers and other companies developing the automated features for cars. ... When the technology fails, manufacturers could get stuck with big liabilities that they will want to cover by buying more insurance. There's also a potential for cars to get hacked as they become more networked."
Insurance is all about a balancing act between charging enough premiums to cover the pay outs as well as whatever profits the company can get away with. Autonomous cars will probably not be able to get away with a zero liability claim, so there will still be a smaller premium to be charged to go along with those smaller payouts.
but premiums will necessarily drop as well and the overall amount of money within the car insurance system will dwindle.
You have no idea how this works, does you? How much you pay for a service has nothing to do with how much it costs to provide a service. It's a matter of how much the market will bear. Why else do you think there are rubes out there still paying for text messages?
And the auto industry has it good, at least here in the states... I don't think there is anyplace it's legal to drive without insurance. They got you coming and going.
"but premiums will necessarily drop as well"
What evidence is there for this statement? Insurance companies are not known for lowering rates. My rates continue to go up even as the value of my vehicles diminishes and I have 0 accidents, 0 claims and 0 tickets on my record.
Autonomous rates will be $400 cheaper when you first get it. And after a few years it will be the same price unless you change companies.
I'm changing back to allstate from 21st century this year. Allstate wanted to charge me $1200 a year-- 21st century was $700. Now 21st century is closing on $1000 and allstate has offered me $1000, $900, $800,and now $700 to switch back over the last 4 years.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
https://en.wikipedia.org/wiki/...
Ok, so this is Traffic deaths as a fraction of total population. We are currently down to less than half of the maximal values that were from the 30s through the 70s. We are back down to 1920 levels of traffic deaths as a fraction of total population.
Has this dramatic decline since 1980 sent these companies out of business?
"One opportunity for the industry could be selling more coverage to carmakers and other companies developing the automated features for cars. ... When the technology fails, manufacturers could get stuck with big liabilities that they will want to cover by buying more insurance."
Would major car manufacturers really pay for insurance? The entire insurance company business model depends on the fact that premiums end up costing more than payouts over the long term average. Consumers choose to pay more over time to avoid the risk of huge one-time costs, but wouldn't car companies prefer to cover these costs themselves so as to save money in the long run?
Ain't nothing going to happen with autonomous vehicles until they solve the rain and snow problem. Maybe California doesn't have to worry about vehicles in precipitation, but the rest of the nation does.
the major advances in civilization are processes which all but wreck the societies in which they occur - A.N. White
"It will be interesting to see if they adapt to the change, or cling desperately to an outdated business model like the entertainment industry did."
Considering that companies were originally started to fulfill a business model, I still find it absurd that they "struggle to adapt" when their business model becomes obsolete or outmoded. It is a shame, even more, that they SUCCEED in many cases. The number of companies that exist now solely for self-perpetuation is absurd and really illustrates the danger of AI in today's world. These corporations are basically the evil of AI embodied. Your opinions may, of course, vary.
We don't have to worry about multi billion dollar industries. They will either change with the markets or they will fail. Or they will be like big oil, big tobacco and big pharma, and just buy our government for a long enough time to pass some laws in their favor. Next.
Seems like a non-issue as there is plenty of room for them to adapt, shifting from away from collision to more detailed versions of comprehensive that will cover minor dings, regular wear and tear and battery replacement.
Personally, I could see a big change in the Luxury car market. I don't think there will be as much demand for high powered cars, as people will be more focused on working on computers or watching TV while cars drive themselves. I could see and increase in demand for luxury interior of cars, as we'll have more time to appreciate the things inside our cars while we're not driving.
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"that's great news for the 30,000+ people who die in traffic accidents every year in the U.S."
Great News? Dude, they are DEAD!
I can go to the bar by myself and get hammered, and not worry about driving home. However I don't think this will happen in my lifetime, regardless of all the Slashdot submissions we've seen lately.
Then of course there's MADD. I assure you that more than one of the neoprohibitionist protofascists behind that organization is crosseyed with rage at the idea of cars that can safely take people home even if they've committed the mortal sin of alcohol consumption. I wouldn't be surprised to find out that some MADD type had gotten so angry that she kicked her little yapping lap dog right through the living room picture window at the mere thought of an autonomous vehicle.
http://www.madd.org/blog/2014/...
"MADD is excited about the possibilities of self-driving vehicles. We support the development of advanced technology that will reduce crashes, fatalities and injuries on our roadways. Both the self-driving technology and the DADSS (Driver Alcohol Detection System for Safety) technology, which automatically detects a driver’s blood alcohol concentration, hold tremendous promise for a safer tomorrow. We look forward to future advancements that will eventually eliminate drunk driving completely."
I do agree with you as far as law enforcement revenue, but I'm sure cities will just find another way to monetize the transportation infrastructure.
Her industry may not exist in 20 years.
In fact, all traffic based lawsuits may vanish as people find it makes more sense to move to a no-fault insurance system when most cars are driven by computer.
excitingthingstodo.blogspot.com
"Boston Consulting Group estimates that self-driving cars may account for a quarter of global auto sales by 2035." If it isn't required that ALL cars are self driving in the US by 2035, I will be very pissed off. I moved to Seattle 7 years ago. Horrible drivers, just horrible.
The smaller amount of claims will result in fewer payouts, and also fewer employees needed for claims administration. But this is just a decrease in costs which will (presumably) be passed on to the consumer through cheaper premiums. The reduction in costs should exactly match the reduction in premiums, so profits should remain stable. A reduced number of claims should not have an effect on profits in the long term as long as the number of drivers stays constant. TFA guesses that the number of drivers may decrease, but I doubt the decrease will be significant; in any case, the focus is mainly on a better safety. So the result will be vastly inflated profits for several years as the number of claims drop, and then a bunch of layoffs as companies cut costs to compete on price. If you WORK in insurance you should be worried. If you OWN an insurance company, you should buy champagne. Warren Buffet says "we would not be holding a party at our insurance company.” Of course not, everyone there will lose their jobs. He will have the party in his house, with the other stockholders.
This is not at all the same as Napster, which resulted in drastically fewer customers for music. I'm no economist, so perhaps I am missing something; feel free to enlighten me.
insurance prices are tied pretty closely to past losses. as car repairs and accidents go down profitability of insurers will go up and then rates will go down (at least relative to inflation). in the US your state department of insurance does this.
the big liabilities question is pretty dumb though. it's like asking for flood insurance. probably that liability will require self insurance or a special accounts type thing.
Insurance companies don't really make money from 'betting' against you having an accident. They make money from the fact that they end up holding huge accounts full of accumulated premiums which they then use to play in the global financial markets. There are still plenty of things that need insurance, so the industry won't exactly disappear, but I'm sure any displaced insurance industry workers will quickly find another way to play the global slot machines with your savings.
These vehicles will be the Edsels of the 21st century. People will find them so annoying that they'll dump them within a year of owning one. And when it hits real world traffic such as in Boston or New York, what a laugher... when you sit there because your auto wussy won't move and every one else is weaving in front of you.
With automated cars, taxis will become much less expensive meaning that fewer people will buy cars so fewer people will need insurance. 20 years from now things are going to be VERY different...
I mean come on, think about it. The year is 2054, your Google Car is taking you home from work as you unwind after a long day and boom, out of the middle of nowhere, James Hetfield leaps onto the hood demanding you stop listening to Harvester of Sorrow or He'll sue you.
Good people go to bed earlier.
The napster situation and the driverless cars are not analogous.
As to falling revenue... the mistake here is conflating the fees with "Profit"... that's revenue.
Technically I can make more money selling you something for 1 dollar as a percentage of expenditure than I can for something I sell for a million dollars.
Companies that sell seemingly cheap shit are often very profitable. Why? Because it easier to over bill someone for something really cheap then it is to over bill them for something really expensive.
If I sell you a candy for a dollar and it costs me 10 cents to make that candy then I'm making 90 cents profit on every dollar of revenue. Could I do that if I were selling you something for a million dollars? Much less likely. This is why for high ticket items the profit margins tend to shrink.
On the point of insurance, the profit is the revenue they take in minus the cost of paying out claims. Now they increase the fees based on two things.
1. What they estimate their claims are going to be.
2. What they think you're willing to pay which relates to what your competitors are offering, market conditions, etc.
Now if the autonomous cars crash less that means the estimated claims are going to go down. And that means costs go down. And that means that due to competition, your competitors are going to lower fees for that insurance because they can get a competitive advantage by doing that. This forces you to lower your own fees until the set price hovers somewhere above costs based on market conditions.
Now for a business to be profitable it has to make a certain percentage profit on capital expenditure. Otherwise your business doesn't make sense. Even making a tiny profit doesn't make sense because there are more profitable things to do with the same amount of capital and you'd be better off closing your business down and doing that other thing instead.
So you need a certain percentage profit. And that means since its on a percentage basis that reducing revenue doesn't actually mean you lose profitability so long as the percentage holds.
Lets say the insurance business goes from collecting 100 billion in fees to 50 billion. Okay... but if the percentage of the fee that goes to profits remains the same then the business while smaller will remain as profitable as ever.
You can't say the same for the music business. What has killed them is that the percentage profits has collapsed ALONG with the revenue. Both collapsed at once. AND the whole thing poses an existential threat to the record industry itself.
That would be a napster moment.
What is more, if anything, I could expect percentage profits to go UP as revenue declines due to cheaper policies in auto insurance. That is, I believe people will get less price conscious as the absolute fees go down. So lets say it costs me 20 dollars per person to offer this insurance to you. Could I get away with charging your 30 dollars for the policy? I could do that much more easily than if the costs were 200 dollars and I wanted to charge you 300 dollars for the policy.
See?
If anything insurance should get more profitable as costs go down. The actual percentage profits of high ticket businesses is often anemic. I've seen lots of businesses get by year after year on 2 to 5 percent profit margins and that is a TOUGH business.
Just think about that... servicing customer after customer and making 5 cents for every 95 cents you spend servicing them. But that's not uncommon.
Ideally where you want to be as a business is having as high a profit margin as you can possibly get your greedy fingers on.
50 percent... 100 percent... 500 percent. You want big fat margins. Even a little renvenue at those margins is gold because it gives you lots of wiggle room to absorb unexpected losses or shifts in market conditions.
If you're making 2 percent per transaction and things change... you could easily be LOSING 20 percent per transaction. *snaps fingers* in a heart beat.
I've decided to stop wasting my time responding to AC trolls/sockpuppets... so if you want a response from me... login.
Maybe they won't pay an army of lobbyists to bribe the shit out of the government so they can perpetuate an obsolete business model and charge people up the ass for services that are no longer needed. Nah just kidding, let's watch them pocket the extra money like they earned it and screw the customer even harder.
I don't know anyone who is looking forward to not driving, but it's quite possible I'm part of a small group. Driving is one of the pleasures in life!
Premiums will necessarily drop? What planet do you live on where prices go DOWN? With the great exception of the computer industry, prices are almost always sticky to the upside. Seriously insurance companies would not be so foolish as to price themselves out of the market.
Seven puppies were harmed during the making of this post.
Vehicles in precipitation... California... let's see... ah, yes, I-10.
Seeing as I'm never going to own an autonomous car, or any car at all once we've switched over to autonomous tech, I'm not going to have any specific insurance premium to pay at all.
The future is that most travelling will be done via uber/zipcar type auto-taxi services. The companies and manufacturers will bare the direct cost of insurance and pass it on to consumers as part of the per-trip rate.
Auto repair shops
Gas stations
Auto parts stores
Taxis and Limos
Motor sports
Motor vehicle related advertising
None of these survive as they exist today. There's probably a dozen more.
Are people going to stop dying unexpectedly from {insert reason that doesn't involve a car}? Is theft or destruction of personal property going to end? No...This is a big product category for the insurance industry, yes, but it's still a gigantic industry.
PS: I don't reply to ACs.
There's going to be more horrific accidents, because lazy people who won't bother to learn how to competently operate a motor vehicle won't have any idea what to do in an emergency situation where they must take control of the vehicle, they'll completely panic, and people will die.
Of course there will be you morons who will say "But AC, there won't be any manual controls in the car for a human to use, the car will take care of everything for us!". No, it will NOT, and there will ALWAYS be a full set of manual controls in every vehicle, with mechanical linkages as part of the overall failsafe design of the vehicle, that gives complete and unimpeachable manual override of any and all automated piloting systems of the vehicle at any time. All vehicle owner/operators will still be required to be educated, trained, tested, licensed, and insured, just like always. You can have as many redundant systems in any vehicle as you like for safety, but the final, unimpeachable backup system has to be a competent human operator. To design a so-called 'autonomous vehicle' any other way would be irresponsible to the point of utter madness and is inviting disaster. Similarly, human vehicle operators must maintain their skills and be re-tested on a regular basis, just like always, perhaps more rigorously than we do now.
If companies that provide auto insurance are smart and see the writing on the wall (I have to assume so, since they are entirely about risk/benefit analysis), they will gradually transform into a different kind of entity. While they'll still provide insurance, they'll turn into a "subscription" version of a car rental company: Customers with the proper plan can request a self-driving car for certain periods, and may even receive a discount for doing so over using their traditional vehicle.
As autonomous car adoption rates increase, these hybrid companies will move more towards being an "auto club", where people pay a monthly fee (likely comparable to the combined cost of a loan payment+insurance) and will be able to order up self-driving cars. Depending on their plan, it may only be with advance planning and an extra charge for on-demand, or it is unlimited on-demand. They use the vehicle as necessary, then send it back.
They might only get so much time to allow it to sit idle, so if they're going to spend a day at Disneyland they have a car that will bring them, send it away, and order another when they go home. In fact, such "clubs" will likely have garages right outside of amusement parks. After all, if your car can drive itself, and you don't need to leave anything in the vehicle, why bother with parking? You could send it home, or to a far-off lot. And if you're going to do that, why bother with owning a vehicle at all? You can avoid all the maintenance of ownership, the cost of having a garage, and registration fees by just using one of these clubs.
The companies will still offer insurance: there will always be people who want to own their own car, self-driving or not. But that will become a "side" business, and the remaining portions of existing businesses may be sold off until you have only a handful of national auto insurers. I doubt the companies that focus on consumers would sell insurance to car companies, as the car companies have their existing liability insurance that will just increase if/when there's added risk from autonomous cars.
Are you shitting me? Most of us were looking forward to the advent of flying cars, too.
Earlier this week...
http://www.pbs.org/newshour/ru...
And who do they think is going to be purchasing all these "autonomous vehicles" and with all the twenty-somethings and millennials moving back home with their parents, how do they think they're going to afford them?
Look, I don't mind advertisements on Slashdot, but goddamn, please stop with the press releases from "anonymous" parties.
You are welcome on my lawn.
I ask because I'd wager at least half of the advertising on the TV are by insurance companies. Geico, Progressive, State Farm, Farmers, and the list is endless. Not only do they advertise aggressively they advertise to different demographics on the same network. Geico has their 15 minutes and the Cave Man and their Gecko and they even spun off the pig from a previous campaign into one of his own. Progressive has Flo and now they have introduced the Box. I say all that to point out that advertising in prime time is EXPENSIVE! If they are spending that much money on advertising then how much are they making in profit that they can afford to air three 60 second spots in a 30 minute time span? I won't shed a single tear if they are forced to charge less for insurance.
"A person is smart. People are dumb, panicky dangerous animals and you know it." - K
First off, most of us really aren't waiting for autonomous cars. Just saying it to grab headlines doesn't make it true. I bike mostly and enjoy driving when I do. I get motion sick when someone else is driving. I could care less about a driverless car.
Second, there's no evidence _at all_ that driverless cars will lead to fewer deaths. It's just pure speculation at this point based on the notion that computers will reduce the number of errors that lead to deaths. There's also just as good a chance that driverless cars will introduce a whole new set of ways that people get killed by cars.
Finally, despite all the hype and small wins by Google, if you actually think through all the technology that still needs to be developed before this is practical, we're not going to see it anytime soon. Sure, Google has some cool tech demos and Uber's convincing scientists to leave stable jobs for high flying startup jobs, but that's just a sign of research, not development. Billions are spent on research programs that are just a "few years away" from practical application. Driverless cars are likely in this category.
Now, what will be cool for consumers and insurance companies is when some of these technologies trickle into ordinary cars. Semi-autonomous driving on highways would be great and is probably only a few years away. Better accident avoidance in cities is also likely to emerge from this. This is the benefit of these billion dollar research programs: while they rarely deliver what's being promised, some really good things do come out of them.
-Chris
Okay ladies and gents, here's the scoop. Auto insurance companies are HIGHLY regulated. They are, by law, only able to make a small amount of profit off premium. Usually about 80% of premium made goes immediately out the door back to the policyholders. The other 20% goes to running the business. Money is made off of global market investments. So yes, it is likely that your rates will go down. Unless of the course the sensors on the cars are so expensive that if they were to get damaged in, say, a flood or hail storm, they would be crazy expensive to fix. There are lots of ways a car can get damaged other than accidents.
Music by specific artists is a unique product -- another artist generally can't reproduce the same music in exactly the same way.
Insurance is the opposite. All auto insurance is essentially the same -- the differences have very little value. If one insurance company fails to update it's business model, 5 more insurance companies will swoop in and take the business.
> Most of us are looking forward to the advent of autonomous vehicles
What you mean we, kemosabe? Which part are we looking forward to? Is it the loss of autonomy? The fact that your location will always be tracked, that you'll be driving only as long as your vehicle is authorized to drive and not one second longer? The insertion of DRM and copyright into an essential part of your life that you previously owned outright? A lot of us like driving the way it is.
They will be more like a boost, since there will be liability for the owners of the car and probably liability for the manufacturers and maintainers of the software and hardware.
Insurance will suddenly drop to $5. Then how are the insurance companies supposed to pay out when someone uses a media player exploit to make all Google cars that were declared unsupported before they received Android Zebra crash into a bus full of nuns?
Insurance companies can not just pop into existence any more than a bank can do so. These industries are monopolies by regulations and license requirements.
Further, to entertain the idea that companies won't collude to make certain people (investors, and executives) huge profits ignores decades of legal realities.
Cars have about a 12 year half life. The composition of the cars on the road will be subject to that. So even if 100% of the cars being made suddenly were autonomous it would be a long time before most of the cars on the road were autonomous. The insurance industry will have a lot longer to see the changes coming than implied here.
The long life of cars is such that I can't imagine the security mess that will come with owning a 10-20 year old autonomous car. People gripe now about XP not getting security updated, but imagine still having Win95 based vehicles still on the roads that are 10 years past EOL support. People will be irate when their Chevy HAL gets an over the air update that disables the autonomous function after the company lawyers freakout over a hard to patch vulnerability.
If the following premise is true, and I think it is, fully autonomous will not happen. My premise is that everything is hackable. If true, then I am not planning on riding in a vehicle which I am not controlling and would not support them in the wild. The one thing that helps prevent accidents is "skin in the game". IE, if I crash into you then I get hurt too. A hacker has no such worry. He/she can cause you to crash into another car and the hacker is not at risk. As all autonomous cars are going to be on the interwebs if for nothing else maps, they will be vulnerable. See Jeep. Just putting the infotainment system caused a vulnerability in the primary systems. If anything, maybe we need to rethink how car electronics are engineered with a complete firewall between any electronics internet connected and any that control the car.
I know this is going to be a very unpopular position on slashdot...
Considering that the "good news" was that "it's a suppository," what did you expect when you were told it was "great news"?
Then of course there's MADD. I assure you that more than one of the neoprohibitionist protofascists behind that organization is crosseyed with rage at the idea of cars that can safely take people home even if they've committed the mortal sin of alcohol consumption. I wouldn't be surprised to find out that some MADD type had gotten so angry that she kicked her little yapping lap dog right through the living room picture window at the mere thought of an autonomous vehicle.
You must be that one guy who doesn't know anybody that has been killed by a drunk driver. Most of us know at least one, if not two or three. I assure you MADD is against drunk driving and not against drinking. I am not a member of their organization, but I think I hate drunk driver's just as much as they do, and drunk drivers deserve every bit of hatred toward them and more.
If you are not allowed to question your government then the government has answered your question.
In practice, it'll parallel the introduction of seat belts, anti-lock brakes, and air bags: either old cars will be grandfathered or aftermarket retrofits will be made available.
Either states will decide you don't need insurance if you have a self driving car, or a company will spring up that will insure self driving cars for a lot less money.
It is one area where capitalism can work. Lets say all the existing insurance underwriters charge $100/month for normal insurance based on human drivers. At that rate they can cover the rate of claims and make a nice profit. Say $20/month ends up being net profit after their operations costs and payout are factored in, and operations are another $20/month.
Well lets say that self driving cars then have a 0.01% accident rate compared to human drivers (it may end up being lower than that). That will drop their payouts by a similar amount, so from $60/person/month to $0.60/person/month. Ok but they decide to keep the price the same, just make more money.
Thing is, they'd still be really profitable at $41/month, instead of $100. Someone else will realize that, and work to steal their business. They might not go that low, maybe $80/month, but it'll happen. Then they'll try to get it back and so on and so forth.
Remember that your costs aren't just based on your specifically, they are based on actuary data of accident likeness. Sure you've had no accidents, but there is a statistical probability that you will. You are in the lowest risk group likely, but it is there. If self driving cars are much lower, rates can again be much lower.
Also, have you checked around? My rates haven't gone up in a long time. Maybe your company is just screwing you because they can, and you'd save if you took your business elsewhere.
For comparison purposes I pay about $350/6 months for $200k/$500k liability insurance on an old, cheap, car.
Most of us are looking forward to the advent of autonomous vehicles.
When you say "most of us", I assume you mean most of the people hanging out with you... and you are by yourself. Because I literally don't know anybody that is looking forward to this.
If you are not allowed to question your government then the government has answered your question.
Since people will have more time to "work" in the car (Ha)...They may spend more time social media-ing, thereby sharing too much or commenting too much and getting into trouble. Car insurers can keep prices high by adding social media stupidity and liability insurance to their car packages. In fact...they can make it mandatory. Not to mention life and health riders, cause now you'll have much more time to eat in the car.
I look forward to the rest of you being forced to use robo-cars cause you suck at driving, I like to drive so I don't care.
Most of us are looking forward to the advent of autonomous vehicles
No, not most of us. None of us.
Insurance will still cost a fortune. The insurance industry is too big to fail .. they will lobby the congress-critters and feed them lots of greens and all will be well. Heck, insurance prices will probably go up. The insurance industry will have a whole new cash cow.
you must be new around here. The premiums will actually rise as they desperately cling to a shirking and outdated market. Eventually, as they thrash in the mud of death, they will lobby congress to change laws in their favor, and enlist the media to sling FUD around..
Most memorable was oncemanyl years go, I used a towing service that was "covered". Two weeks later, my insurance bill went up over twice the amount of the tow. No accidents, no tickets, nothing at all to raise it - and since I was paying twice a year at the time, they were quadrupling their punishment that I had the audacity to take some of their money. Cry me a fucking river insurance companies.
The shepherds did so well protecting the flock that the sheep no longer believed that wolves existed.
You don't drive your house around, but you still insure it. Home insurance is a thriving industry, despite the low odds of payouts, especially compared to the odds of payouts for car insurance. Don't worry, car insurance companies will still be in business, and make money. They will adapt.
I'm waiting for anonymous cars.
If that is the case, why does MADD support charging drunk drivers who sleep it off in the backseat, keys left well out of reach? And why are they selling virgin drinks with MADD plastered all over them? Heck, I've never even seen them attempt to repeal anti-overnight parking laws.
Much as I think it's unlikely, I'd LOVE to see a cyber-security bill (a good one, not a crappy destroy-your-privacy version like the government keeps trying to pass) which would impose mandatory penalties for unauthorized remote access to a system/device owned by a consumer, and a requirement that manufacturers carry minimal insurance for such.
Not only would that help the insurance industry, but we might actually get companies to actually pay attention to cyber-security, instead of blindly and idiotically connecting everything to easily exploitable remote access points (hello Chrysler, OnStar, et all). Moreover, we might get real fixes for problems, instead of the "oh well, buy the suckers identity theft protection and move on" dismissal for huge breaches. If we're really lucky, the law can include secret, unspecific, unsupported, unconstitutional orders from secret, pseudo-judicial courts under the blanket of "unauthorized access" (we can dream). At a minimum, though, it would be a good thing.
Given that car insurance costs less than it pays out and it is only a loss leader to get you to pay for insurance on other, more profitable endeavours, the drop in premiums will likely lead to a lower loss rate for the companies.
It *might* lead to fewer people getting their other insurance with the car insurance companies. But not very likely.
As long as the net cash flow and earnings per share remain the same as they would have been without autonomous cars, what does it matter?
fuck off to whomever "overrated" this. It's a great example.
Moding something down isn't supposed to mean "I disagree."
The first lie is that everyone will use autonomous cars in any recent period. It will take decades to get the old cars off the roads. And there are no autonomous motorcycles or scooters or bicycles or hundreds of other non-autonomous things that can cause crashes. And why the hell would anyone want an authonomous motorcycle or bicycle??
The second lie is that everyone will use their autonomous car in autonomous mode. If the road is icy, will your car just stop?? Many will not have the patience for that and will take over control if the car deems it too dangerous to continue or drive at an acceptable rate. At least until people lose all of the driving skills.
I can bet with some certainty that autonomous cars won't go over the speed limit. I find it highly doubtful that a majority of the population that now enjoys driving 5-10mph over the speed limit will allow that. And I doubt if autonomous cars are going to include a 'drive over the speed limit' function.
I've thought about this, and while I might enjoy the car taking over for short periods, if I have to sit behind the wheel, I might as well drive. And, quite frankly, I enjoy driving. My daughter and I just drove to Michigan from Phoenix together over 4 days (she was moving). We had a great time. Over the next few months, I'm going to be driving to Florida twice, once by myself. I think it might be great to have a car that can take over if I fall asleep, but what's the use in driving if you can't drive??
I look forward to the technology that comes out of autonomous car tech that will help to reduce crash rates. Improved alerting capability is a great feature, and already available in many cars. The ability to switch it on so one can text or take a phone call is great. I see autonomous features being used periodically, not all the time.
This is no different from adapting to increased internet demand to use their product. Those that adapt will rule the market. Those that don't will die and get taken over by the rulers.
If I am correct, the insurance companies have decades to adapt. As revenues decrease, employees won't be replaced. Further automation will take place. Stock prices may drop and dividends may decrease, but companies don't make money from stock once the stock is sold. Investors can demand change all they want, but if everyone in an industry is in the same boat, the smart ones will flee leaving others holding overpriced shares and watching them tumble. If I was a CEO of an insurance company, I'd start taking advantage of any ability to sell that I can.
Yawn ... nothing to see here... move along.
I rarely read replies, it's my opinion and if you thought about your opinion a little more, I'm OK with that.
This is the plan:
1. Introduce "snitchbox" policies, done.
2. Price snitchbox policies lower, done.
3. Raise rates on "due process" (non-snitchbox) policies to compensate, in progress.
4. No rate reduction without conversion to snitchbox policies, in progress.
5. Phase out due process policies, eventually.
Goal: Get the poor and the dissident off the road. Profit is a by-product.
Watch me get disappeared.
KM:EY
Really? In sick of writers making declarations they can't back up.
Moding something down isn't supposed to mean "I disagree."
Mod parent up.
To have a right to do a thing is not at all the same as to be right in doing it