Autonomous driving technology has the capacity to utterly transform the landscape not only for commuters, but for auto insurance providers, which are anticipating an initial increase in claims and a gradual transition in liability from the driver to the car.
With autonomous vehicle models like GM’s Cruise AV rapidly approaching production and deployment in rideshare and ride-hailing fleets, the insurance industry is racing to figure out how it will fit into the new environment. Mass AV adoption is expected to occur gradually over the course of a few decades, but even the initial slow trickle of AVs into the public sphere will have ramifications for auto insurers.
“There’s angst, anxiety, worry [because] we’re heavily in the auto business,” Neil Alldredge, Senior VP of Corporate Affairs at the National Association of Mutual Insurance Companies, said at an Ann Arbor conference this month. “We should do everything we can to understand the technology around autonomous vehicles, but don’t panic. There’s some time here to work some of the things out.”
Autonomy is widely expected to increase insurance rates initially, as any accidents that might be avoided or lessened in severity by the technology will most likely be outmatched by the extra cost of repairing or replacing high-tech instruments after a crash. Already the insurance industry has seen something similar with emerging active safety systems; according to Center for Automotive Research VP of Transportation System Analysis Richard Wallace, insurance rates have risen by about 10 percent for cars with emergency brake-assist and parking guidance systems.
That’s because otherwise small accidents can damage expensive sensory equipment, having an effect not only on the cost of repair parts, but on the labor required to perform a complete fix.
Long term, however, as the autonomous vehicle mix grows and accidents (presumably) become less frequent, insurance claims – and therefore, premiums – ought to decrease. Yet at the same time, auto insurers could see their customer bases shrink as a greater percentage of urban commuters find it easier to use rideshare and ride-hailing services to get around, and manufacturers like General Motors might opt to insure their fleet vehicles themselves.
Since GM will own the software and data used by their autonomous vehicle fleets, the company could find itself in a uniquely favorable position to investigate and process claims itself. Auto insurers could thus find themselves having to get creative with what sort of products they can offer to users, such as insuring against cyber attacks.
Stay tuned to GM Authority for all the latest GM autonomous driving news.
(Source: The Detroit News)