This new age of technology could mean a new age of insurance. New technologies, such as self-driving vehicles, will force insurance carriers out of the “stone age” to meet the needs of a modern-day family. Insurance companies face competition with car manufacturers as more and more consumers are directly relying on the manufacturer for insurance. Car manufacturers benefit from directly providing insurance because consumers are not given an alternative vehicle brand option.
The New Technologies Used in Vehicles
Technology poses another threat to the insurance industry. Cars today contain telematics, also known as a black box, to monitor driver behavior, speed, and breaking trends. This information is sent directly back to the manufacturer. Insurance agencies are also trying their hand at this technology, offering lower premiums to safer drivers. The best way for insurance companies to handle this influx of information is to form joint partnerships with car manufacturers. This has already been the case with Japan’s Toyota Motor and Aioi Nissay Dowa Insurance, who are developing car insurance based on the driver’s habits.
Ford, BMW, General Motors, and Jaguar Land Rover all have already linked their vehicles to the driver’s smartphone, allowing drivers to control almost everything such as controlling the rate they accelerate or brake or even honking the horn all from their app. This information can also be used for developing personalized insurance policies based on driver behavior. The number of policies using telematics for developing insurance policies tripled in the United States from 2013 to 2015 to 6.8 million.
Autonomous Cars Might Affect Insurance Policies
Autonomous cars are another example of fast-approaching technology to the car market. This time it is expected that car manufacturers will benefit more than the insurance companies in providing drivers the optimum insurance. Volvo officially releases its driverless cars in London next year. Mercedes, Google, and Volvo have claimed they will take liability for accidents in their driverless cars. This could mean that insurance policies may only be needed for theft or fire. Jerry Albright, principal at KPMG’s actuarial and insurance risk practice, believes “more of the liability will be absorbed by the manufacturer or the entity that has made the algorithms behind the brain of the car” as cars are becoming more and more autonomous.
A 2015 KPMG report predicts the personal car insurance sector may shrink 60% within the next twenty-five years. In addition to manufacturers assuming liability for automobile accidents, self-driving cars are expected to drastically decrease the number of accidents occurring each year. This, as a result, would force insurance premiums even lower.
How Insurance Agencies May Respond
Insurance agencies may further adapt to the new age in technology by developing specialized policies for cars that use autonomous technology. One such policy could include cyber insurance against hacking of connected or driverless cars. With reliance on such new technology comes an unknown frontier for security. Insurance policies for this specific area may grow in popularity as a result. Insurance companies may also offer liability cover to car manufacturers so that they can better work together.
Even with all the changes in technology, car accidents are still a reality. If you have been injured in a car accident, you may have a personal injury claim. Contact The Dixon Injury Firm today for a FREE Consultation by calling (314) 208-2808.