Autonomous Industry Could Hijack Telematics Model Suggests Shop Insurance Canada
August 19, 2016 (PRLEAP.COM) Business NewsAugust 19, 2016 - Shop Insurance Canada says a recent report from KPMG is worrying for proponents of telematics technology as a basis for the car insurance industry to survive the autonomous vehicle age.
The talk of autonomous vehicles destroying the auto insurance industry is becoming as common as the line about how they will transform traffic safety. Both scenarios are likely true, and the latest to suggest driverless technology will disrupt insurance is KPMG.
The market researcher agrees with a market consensus that car manufacturers will take liability and may even offer their own coverage products. KPMG goes as far as to suggest that the auto insurance market will decrease to 40% of its current size, a 60% decrease compared to 2015, within 25 years. The company says this is likely to happen because autonomous vehicles will reduce the number of accidents.
"As the car becomes more autonomous … we believe more of the liability will be absorbed by the manufacturer or the entity that has made the algorithms behind the brain of the car," said KPMG principal Jerry Albright. "At one point, does that become such a large portion that carmakers say, 'We will insure all these cars'?"
KPMG even argues that autonomous technology is not needed for manufacturers to create their own insurance products. Damage to the insurance industry could come sooner, from telematics devices. Long billed as a way for the industry to revolutionize in the face of autonomous cars, telematics could also bring problems.
Chiefly, if it is the manufacturers supplying the devices and data, as is being mandated in some regions, then those same manufacturers could develop their own policies. Shop Insurance Canada says insurance companies should not be put off and press ahead with telematics as a strong feature of future coverage
"Yes, if automakers assume liability, it is likely they will adopt telematics devices too. However, insurance companies still have time to develop their own telematics based solutions. It is, however, interesting that a technology long mooted as a savior of the insurance industry could actually hurt it. Watching the impact of telematics either positively or negatively could tell us a lot about how the auto insurance industry will survive beyond the autonomous rise."
Of course, 25 years is a long time and over the next quarter of a century the auto insurance sector can innovate to find solutions. Predictions are gloomy at the present, but there are potential avenues for insurance providers. Namely, striking early deals with auto manufacturers over a long term period to supply insurance for their autonomous vehicles.
About Shop Insurance Canada
Shop Insurance Canada is a Toronto based company that specializes in delivering the best auto insurance products to customers around Ontario and Canada. The online auto insurance quote tool uses an engine that is easy to use and accurate enough to deliver the best auto insurance quotes from over 25 of Canada's leading providers. Shop Insurance Canada also offers expert advice on the auto insurance industry, as well as guides and news to help customers find the best deal possible.
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