Nine months after we published The Future of Car Insurance – placing a timeline on the evolution towards driverless cars – developments suggest acceleration towards this goal should leave insurers considering new approaches.
Our report charged that, rather than focusing on the end point of fully autonomous vehicles, insurers needed to consider the stages in between, with each requiring reflection on the consequences for the shape of car insurance. Developments in the last few months suggest this should be done with a reasonable sense of urgency, with that end point perhaps a little closer than expected:
- Thatcham has upped the ante on a perceived pace of development, predicting that drivers may be able to read a book while on the motorway by 2021, and be driven door-to-door by 2025.
- Volvo announced, at the end of April, that it would be conducting the UK’s largest autonomous driving trial from 2017, with up to 100 vehicles involved.
- In the US, Ford has tripled its driverless vehicle testing fleet to make it the largest test fleet of any manufacturer.
- General Motors has invested $500m in short-term car rental outfit Lyft, with a long term vision to eventually deploy driverless cars to be hailed for rides.
The onus for insurers to strategize the next step of the business model is growing. In the longer term, such changes may drive providers to shift towards a data-led risk or life “management” set of services. In the shorter term, trends nodded to by the General Motors deal show that insurance solutions will need to be flexible (see Cuvva’s service for example) and cater to a shared-resource or “Uber” generation, where the concepts of insurance and “personal belongings” are redrawn.
By Stewart Mcewan, Head of Content, UK General Insurance