How driverless cars will transform auto insurance and shift burden onto AI and software

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We know it is coming. Time to think about how it will impact us each. For example, how about not worrying anymore about four wheelers whose drivers have no clue how to merge into traffic on a highway safely. What about RVs and other vehicles that still have drivers. Does our insurance go up as opposed to folks with the latest vehicles that do take over in an dangerous situation faster than we can?

 

Excerpt:

 

"In the era of autonomous cars, driving will become safer. With a predicted 80% drop in accidents by 2040, there are major implications for the car insurance industry. Here's what you need to know.

 

With almost every major car company—and even tech companies like Google and Apple—looking to unveil models of self-driving cars in the next few years, considerations for car safety are being radically altered. According to a report from KPMG, there will be an 80% drop in accident frequency by 2040.

 

So what does this huge drop in accidents mean? According to Jerry Albright at KPMG, "the implications for the insurance sector are going to be profound. They have to completely transform their business model."

 

How cars are getting safer

 

Humans are responsible for 90% of the accidents on the road, said Albright. So when cars make more and more decisions, with tools like like lane assist, self parallel parking, traffic jam assistant and more, accidents drop. "When you remove the human element with something that can react quicker, detect with sensors and lenses, perform a full environmental driving scan," said Albright, "the vehicle risk profile is going to change, and it's going to get safer."

SEE: Autonomous driving levels 0 to 5: Understanding the differences

 

And, as automated vehicle technology moves toward level 5—offering a completely driverless experience—safety increases. The Insurance Institute for Highway Safety's research shows that fully-engaged technology, meaning that you don't turn off any function, translates into a 7% to 15% reduction in property damage claims. Still, "you don't have to wait to be at a level four to realize the safety benefits," said Albright. "Each generation, each capability that advances the autonomous technology—be it lane assist, stop and go traffic—all of those continue to improve the safety profile of the car."

 

The article goes on to cover in depth:

 

The rise of the "smart" car

 

Impact on insurance companies

 

With new technology comes new risks

 

The 3 big takeaways for TechRepublic readers

1. The auto insurance industry will change dramatically with autonomous vehicles, and the burden of indemnity could switch from drivers to the software and systems powering the vehicles.

2. The driverless cars of the future will talk to each other (V2V) and the infrastructure around them (V2I) to provide a far safer driving experience than humans currently can.

3. With the rise of autonomous vehicles, there are will be demand for a lot more tech jobs in the auto industry in the years ahead.

 

See all the details and the rest of this article here: http://www.techrepublic.com/article/how-driverless-cars-will-transform-auto-insurance-and-shift-burden-onto-ai-and-software/?ftag=TREe09998f&bhid=19724681974700635514865380622813