A recent study conducted by KPMG LLP, an advisory form that operates in New York state, has found that if self-driving car technology continues to grow and develop as it has over the last five years, it could reduce the frequency of accidents by as much as 80% by the year 2040. This could mean big changes are coming not just to how people drive, but to how they ensure their vehicles. If there are 80% fewer accidents, we are likely going to see a trough in insurance premiums.
While the average cost of replacing or repairing a vehicle might jump by more than $20,000, the significantly reduced frequency of accidents that require a replacement or a repair means that the insurance industry is going to see a major upheaval in their system. There are currently two giant companies that are working on autonomous vehicles, the first being Google and the second being Apple. Google is already testing their self-driving cars across the nation, while experts predict that Apple will have their first models on the road by 2019.
When those cars do hit the general market, they are going to make a serious impact, possibly completely changing how consumers buy insurance and interact with their insurance companies. Almost every insurance company that participated in the study said that they expected that policies would have change. Self-driving cars are going to change how consumers get around and they are going to transform the industry that provides insurance for vehicles. Most aspects of the industry are already gearing up for the change, preparing to make the necessary changes to regulations and technology to allow for these cars. The insurance companies themselves will have to determine how they are going to respond to this change.
