Everyone is waiting for a disruptive innovation brought about by driverless vehicles to insurance and other sectors. However, in a survey by KPMG, 84 percent executives don’t expect autonomous vehicles to have a significant impact on their business until 2025.
About 42 percent of executives in the survey expect a significant impact in six to 10 years. KPMG found that few carriers have taken action not due to doubts about the possible ramifications, but rather because they believe the potential impact is too distant in the future to begin preparing.
Many articles have recently been written on the topic with experts believing that driverless cars will completely nullify the need for insurance, probably making the auto maker liable for any mishaps that might occur. This will impact the $85 billion in personal and commercial auto premium in US alone.
The industry is yet to see any threat right away. Nearly three quarters of insurers feel they are unprepared for autonomous vehicles today. In addition, more than half of respondents (55 percent) believe that regulators will impede the adoption of autonomous vehicles, which may help to explain why they anticipate a more distant effect on their business, the KPMG survey says.
In fact only 29 percent of the respondents of the study had good knowledge of autonomous cars. Even smaller percentage of 10 percent developed a strategic plan to deal with the impact of such cars.
Insurers however believe that autonomous cars will require significant changes in underwriting, product management and claims too. Insurers believe that there will be opportunities to develop different products to cover autonomous vehicles, which will also open the door for new competitors to enter the industry. At the same time, many anticipate increased consolidation among the traditional writers,” KPMG said in a press release.