Self-Driving Cars Will Change Auto Insurance

Since Henry Ford introduced the moving assembly line, the changes in the auto industry—and to vehicles themselves—have been incremental and evolutionary. Now the industry appears to be on the cusp of revolutionary change, which will be engendered by the advent of autonomous or “self-driving” vehicles—and the timing may be sooner than you think, according to a new report by KPMG LLP, the U.S. audit, tax, and advisory firm, and the Center for Automotive Research (CAR).

self-driving cars

The report, titled Self-Driving Car: The Next Revolution, is based on interviews with leading technologists, automotive industry leaders, academicians, and regulators, as well as research and analysis of industry trends. The study examines the forces of change, the current and emerging technologies, the path to bring these innovations to market, the likelihood that they will achieve wide adoption from consumers, and their potential impact on the automotive ecosystem.

The findings are outlined in four sections:

  1. Market dynamics: Examines the market dynamics and the social, economic, and environmental forces that are making change inevitable.
  2. Convergence: Discusses the ongoing convergence of the key enabling technologies.
  3. Adoption: Focuses on the path to widespread adoption of advanced automated driving solutions, which they believe will take place in stages, leading over time to reliance on increasingly autonomous or “self-driving” vehicles.
  4. Implications for investment: Addresses the social, political, and economic implications of self-driven automobiles and their impact on the entire automotive ecosystem.

Gary Silberg, national automotive industry leader for KPMG LLP, added, “Like many of the industry leaders, academics, and policy makers interviewed, we believe the age of the self-driving vehicle is coming. But getting there will require that many pieces of a large puzzle fit together. When and how that will happen remain open questions.”

Automotive and technology companies are already investing in connected and autonomous technologies and applications. While there is no clear leader, companies are trying to figure out how to compete and collaborate at the same time. Over the longer term, the evolution of these advancements will cause a rebalancing of the automotive value chain, with nontraditional firms playing a more significant role.

Steve Anderson provides information to insurance agents about how they can use technology to increase revenue and/or reduce expenses. He speaks professionally to hundreds of agents each year on the future of technology, the social web, and how insurance agencies can establish their Internet presence.

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