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Autonomous Vehicles: Will insurers shift their business model?

Autonomous vehicles have an effect on those who are building cars and it is expected that they will diversify because car manufacturers sales are predicted to decrease massively in the future as ride sharing and other forms of the sharing economy increases.Screen Shot 2016-08-24 at 1.57.59 pm

Manufacturers are adopting ADAS at all levels. Therefore each iteration of the car increases the level of autonomy. As car ownership decreases, manufacturers will have to find additional revenue streams. They may for example branch into insurance because if the driver is not responsible in an autonomous vehicle, then the maker potentially is.

With driverless vehicles, insurers are likely to focus mainly on insuring car manufacturers from liabilities and from technical failure of their autonomous vehicles as opposed to protecting private customers from risks associated with human error accidents, according to McKinsey.

McKinsey also states that this change could transform the insurance industry to an industry that involves a few OEM’s and infrastructure operators.

Of course Car And is automating the insurance process by delivering instant insurance pricing based on the data held within the system.


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