Insurance Companies Looking For Fallback Plans To Survive Driverless Cars (csmonitor.com)

An anonymous reader writes: Driverless cars could mean a huge downsizing of the auto insurance industry, as the frequency of accidents declines and liability shifts from the driver to the vehicle's software or automaker. This is compounded by the rise of ride-sharing services. Once summoning a vehicle to take you somewhere isn't limited by the number of people available to drive them (and are correspondingly cheaper), car ownership is likely to decline. Many major automakers and tech companies are throwing billions of research dollars into making this happen, and insurance companies are trying to figure out how to survive. For example, a recent patent application shows State Farm is betting on collecting massive amounts of data about you. While they'll no doubt use it to set your insurance rates, they also plan to "send you advice, alerts, coupons or discounts on insurance or other goods and services." Traveler's Insurance is thinking along somewhat similar lines. They want to create "a device that offers specific suggestions for managing errands and other travel. Customers would be able to see a map of 'risk zone' data for places they want to go, such as stores, restaurants and roads. They could then plan the day 'with an eye toward how risky such endeavors may be,' according to the patent application."

Comments

Seems non-sequitur.

[halivar]

They plan on monetizing this data with or without driverless cars.

Re:Seems non-sequitur.

[vtcodger]

Seems to me like there are an awful lot of folks planning to make a living if not a fortune off advertising and data mining. It's working OK so far, but I have a feeling that there's more than one thing that can go wrong with those plans. ... and on a rather grand scale.

Re:Seems non-sequitur.

[BarbaraHudson]

You've got it. There's only so many dollars available for advertising. Insurance companies will be seeing huge drops in auto insurance, so they will not have as much money to spend advertising on TV, radio, junk mail, etc. The more businesses offering targeting data into a smaller advertiser base, the less the revenue per business. Simple supply and demand rules.

And the auto manufacturers are big enough to self-insure ...

Then there's the aging population ... why should someone who's retired and only drives to the store once a week bother with the hassles and expenses of owning a car - especially if their vision, coordination, or side effects of medication make it too risky?

trying to figure out how to survive

[Anonymous Coward]

as a longitme customer of these insurance companies i have this to say...

DONT find a way to survive you useless fucking leeches. You serve no purpose whatsoever, you are useless middlemen who profit from the suffering of others & add nothing beneficial to society.

Rather than finding a way to survive, you should curl up in a ball and die.

Its the best thing for everyone involved.

Re:trying to figure out how to survive

[MachineShedFred]

Insurance would be a beneficial product, if the insurance company didn't try every little trick they can to avoid paying out on the policy. I've got no problems with an insurer who actually lives up to their end of the contract - but those are few and far between it seems. Now they just want to have government-mandated invoicing, followed by never actually insuring the risk.

This is why everyone universally hates insurance companies, even more than telecommunications companies. They are the biggest bastards on the planet.

Re:trying to figure out how to survive

[Richard_at_work]

Insurance doesnt just exist to cover the damage to your car, it exists to cover liabilities an individual could never pay.

Now I know that US auto insurance has ridiculous things like a cap on liability, but here in the UK my $350 a year covers me, my car, any injuries I sustain, any injuries I cause and any damage I cause.

So, if I hit someone and their injuries are such that they need round the clock, 24-7 medical care, specialist equipment and other costly things, my insurance will cover that regardless of the ultimate cost - insurers have covered cases in the past with lump sums of milions, and ongoing care payments in millions a year.

Thats the sort of costs a normal person could not hope to cover from their wages. Infact, thats the sort of costs a normal person couldnt cover even if you liquidated their entire estate. So if the person liable cant pay because of a liability cap, what happens in the US? The victim gets stuffed with all the costs of being crippled for the rest of their life.

Thats what insurance is intended to cover, and in sane countries thats what it does cover.

Is it really a big issue?

[scamper_22]

Are driverless cars really the big game changer for auto insurance?
I'm in Ontario, Canada and I just don't see how this is going to change things.
We already have 'no-fault' auto insurance, which basically means you buy car insurance to protect yourself and liability.
You don't go around suing the other drivers or anything. When you make a claim, you just deal with your own insurance company.
The rate you pay is still based on your risk.

So, we have driverless cars. You still buy insurance to protect yourself and liability.
Maybe some of the risk metrics change. Like cars with a better record of being driverless get lower rates? But that's no different than rating cars for safety today.

I suppose some countries might need to change how their auto-insurance works. Moving more towards no-fault insurance.
But it's not like the world doesn't have plenty of models to choose from that would better fit the driverless world.
They don't have to reinvent the wheel as far as I can tell.

Re:Liability...

[ranton]

The article is identifying an obvious problem (insurance industry upheaval from ride sharing and driver-less cars) but providing grossly incorrect insights and details about the problem. Car insurance will not go away because of ride sharing or driver-less cars. No one rational is claiming this. But each of these new realities brings a unique problem.

Ride sharing shifts the insurance to the owner of the ride sharing car, instead of each individual rider. The number of miles driven won't go down (significantly), but the number of people being marketed to will. This is probably a good thing for the large insurance companies as they move from B2C to B2B, but individual insurance salesmen will be drastically hurt.

Self driving cars also still need insurance; just not as much. And a large portion of the insurance burden will fall to manufacturers instead of just on drivers. Insurance companies will not be able to make the same kind of profit overall on large multinational car companies that they can on the public.

So the insurance companies will still be there, but its not unreasonable to think they could be half the size or smaller. Or at least their automotive division would be.

I hope for the death of the insurance industry.

[Lumpy]

Insurance is the longest running legalized scam. And they have been getting steadily greedy. For example car insurance companies made RECORD PROFITS last year and they are raising rates because gas prices are too low.

It's time either they get heavily controlled by the government again or go away.