As much as 60% of motor premiums could be lost, report suggests
Law firm Kennedys is predicting a major shift away from the traditional premium income model for motor insurers if automated vehicles take hold.
Speaking to 6,000 consumers and industry stakeholders across six countries – including the UK – the firm said that some insurers could lose up to 60% of their motor premiums because of automated vehicles, with cover moving to manufacturer product liability and software providers.
Automated technology would lead to fewer accidents and reduced vehicle wear and tear, it said. But nearly half of its UK respondents thought that insurers would increase premiums on the back of automated vehicles, with challenges such as sourcing parts a factor.
However, the survey revealed there is little appetite for driverless vehicles at the moment in the UK, with less than a quarter of respondents supporting the concept, and 48% only in favour of partially automated transport.
Safety was given as the main reason for the reluctance, with 63% preferring to trust human judgement over computers. Over half also feared cyber hacking attacks.
The UK was also found to be the least supportive of the idea of autonomous driving of the six countries surveyed, because motorists ’enjoy driving and don’t want a computer to do it for them’, the report said.
Last month, electric vehicle pioneer Tesla launched its insurance product, called Tesla Insurance. The product, currently only available in California, is designed to provide a competitive price for Tesla owners, with the company stating that it will be able to offer drivers with up to 20% or maybe even 30% lower rates.
Subscribers read more