Theevolutioninself-drivingvehiclesTrendsandimplicationsfortheinsuranceindustry030710ExecutivesummaryInsuranceimplicationsConclusion•Anevolvingcompetitiveenvironment•Along-termgamewithshort-termimplications•Incrementalautomationischangingtherulesofthegame•Long-termimplicationsfortheautomotiveandinsuranceindustries•Challenge1:Whatriskswillremain–andwillnewonesarise?•Challenge2:Whoisthecustomer,andhowwillwedobusinesswiththem?•Challenge3:Howwilltheinsuranceproducthavetochange?•Challenge4:Howwillwepriceit–andcanitstillbeprofitable?•Challenge5:Whatinfluencewilllegislatorshave?1|Theevolutioninself-drivingvehicles2Theevolutioninself-drivingvehicles|ExecutivesummaryAnumberofsocial,economicandtechnologicaltrendsareworkingtogethertodisruptmobility.Theautomotiveindustry,inparticular,isexperiencingamassiveamountofchange.Inthenot-too-distantfuture,fullyautonomousvehicleswillbethenormratherthantheexception,redefiningurbanmobilityasweknowit—andtheywillbeshared,connectedandgreen.ThegeneralexpectationforthefutureiscapturedbyacommentbyMaryBarra,ChiefExecutiveOfficerofGeneralMotors.Lastyear,shesaid:“We’regoingtoseemorechangeinthenext5to10yearsthanwe’veseeninthelast50.”Thesechangeswillnotonlyaffecttheglobalautomotivemarket.PerhapsthemostcomplexchallengeswillbefacedbytheglobalautoinsurancemarketwhichisvaluedatanestimatedUS$700b.3|Theevolutioninself-drivingvehiclesAnevolvingcompetitiveenvironmentAllmajorcarmanufacturersareactiveinthisspace,withnewpartnershipscontinuouslybeingannounced.Mostautomakersareracingtodifferentiatetheirpremiummodelswithintelligentdriver-assistfunctions,suchassmartcruisecontrol,accidentavoidance,andcrashmonitoringandreporting.Theseeffortswillhastenconsumertrustindriverlesstechnologyandacceleratetheproliferationofthetechnologyforallcarmodels.Somemanufacturersaregoingevenfurther;forexample,Volvo,anautomakerknownforsafetyalthoughrelativelysmallintermsofglobalsales,predictsthatitwillbeabletoeliminatecrashesaltogetherforanyonedrivingoneofitscarsby2020...
