’It’s a whole new category of insurance and it’s going to be huge,’ says chief operating officer

When it comes to the future of the motor insurance industry and self-driving cars, some firms will “choose to bury their heads in the sand” while others will take advantage of the opportunity it presents.

That was according to Rebecca Downing, chief operating officer at By Miles, who was speaking at a keynote session entitled Reinventing Motor Insurance in an Era of Disruption at the MoneyNext conference yesterday (19 June 2024).

She explained: ”[The rise of] technology often gives rise to completely new types of insurance. Yes, it could be a threat – but on the other side of threat is opportunity.”

And while Downing admitted that self driving technology had improved rapidly to the extent that it is “getting a little bit hairy for car insurance,” she added that the motor insurance sector was well placed to take advantage of the opportunities this would bring.

“We already have partially self driving cars,” she added.

”For instance, the Tesla Model S and the Mercedes EQs. The UK Government has already pledged to legalise these cars on our roads by 2026 so it’s not that far away.”

Blockbuster lessons

Downing questioned why the industry was not moving to seize the opportunity that self driving technology presented and laid out the potential disastrous consequences if it did not begin to accelerate.

Utilising the example of now defunct video and DVD borrowing store Blockbuster, she explained that a failure to adapt to change could be catastrophic for the motor insurance sector.

She told the audience that Blockbuster did not fail due to the rise of modern competitors like Netflix and other streaming services – it failed because it didn’t recognise the need for change.

She explained: “The lesson here is that whatever solution you provide your customers with today is not as good as what is coming.

“Self driving cars may remove human error, but now there’s a whole new risk – because computers still fail.

“The whole point of insurance is to safeguard against things that could go wrong and this is a whole new category of things that could go wrong. For example, cybersecurity insurance will be needed for driverless cars.

“It’s a whole new category of insurance and it’s going to be huge.”