Autonomous Vehicle Technology Could Shrink Auto Insurance Sector By 71 Percent By 2050 And Radically Change The Type And Amount Of Insurance Sold: KPMG Report
"Insurance companies will have to make important strategic and tactical changes sooner than anticipated to navigate through this turbulent transformation of the industry," said
The Triad of Disruption in the Auto Insurance Industry
Three major forces are disrupting the current,
- Autonomous technology is making cars increasingly safer, leading to a potential 90 percent reduction in accident frequency by 2050.
- Auto manufacturers (OEMs) will assume more of the driving risk and associated liability, and have new opportunities to provide insurance to car buyers, taking market share away from traditional insurers.
KPMG estimates that by 2050 there will be a significant increase in products liability insurance to 57% of total auto losses in order to cover the autonomous technology in vehicles, and a considerable decrease in personal auto insurance to 22% of total auto losses. - The rapid adoption of mobility-on-demand is quickly translating into the need for less personal auto coverage, with the use of fleets requiring commercial auto insurance.
"Insurance companies are varied in their level of preparedness for this disruption and many have taken limited action to face this challenge," said
A New Mix of Auto Insurance Coverage
By 2024, the majority of travel within cities and surrounding suburbs is expected to be on-demand rather than with a personal vehicle, and by 2035 it is expected to be the new normal in transportation. As a result, products liability coverage and other new types of insurance are expected to pay a greater share of claims resulting from roadway accidents. Cyber risk is a good example of a new type of risk associated with the era of driverless cars, and market participants are building new products to cover the potential hacking of autonomous vehicles.
Autonomous Capabilities on a Fast Track
The auto insurance industry is further disrupted by the surge of "smart money" generated by a variety of sources including venture capital (VC) firms. "The infusion of capital is boosting the development of autonomous capabilities and related business models, thereby accelerating the pace at which highly automated vehicles will hit the market," added Schneider.
About
Contacts: |
Andreas Marathovouniotis |
|
KPMG LLP |
|
|
201-307-7608 |
201-505-6065 |
|
917-957-1174 (c) |
732-546-4212 (c) |
|
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/autonomous-vehicle-technology-could-shrink-auto-insurance-sector-by-71-percent-by-2050-and-radically-change-the-type-and-amount-of-insurance-sold-kpmg-report-300480869.html
SOURCE
Cuomo organizes local health expert panels to fight GOP health bill
Combine Solicitation – Q– Interventional Radiology Services-614
Advisor News
Annuity News
Health/Employee Benefits News
Life Insurance News