Driverless Cars’ Next Disruption: Insurance

The auto insurance industry is preparing for a future of autonomous vehicles. Leslie Scism writes forThe Wall Street Journal that in 2015 car insurers brought in $200 billion in premiums.

However, as much as 80 percent of that revenue may disappear in the next several decades due to the adoption of autonomous vehicle technologies, which could potentially result in massive safety improvements.

Deloitte Consulting expects car-insurance premiums to drop to $40 billion by 2040, and it expects $100 billion to shift to product-liability insurance as responsibility for car crashes moves to automakers and safety equipment suppliers.

According to Scism, premiums will likely be calculated by how often cars face hacking attempts in certain parts of the country and how good satellite imagery is in areas. Currently, premiums are calculated by dividing the average number of miles driven by the number of accidents.

These improvements in safety will translate to lower insurance prices for consumers and also safer vehicles, while at the same time upending how we understand traditional industries like insurance.

More Blog Posts

07-13-2018 04:07pm

Pretrial Justice Bail Reform Poll

A new survey—conducted by the Charles Koch Institute and the Pretrial Justice Institute—asked Americans about their knowledge and opinion of the United States’ pretrial justice system. Respondents were clear: the current system favors the wealthy and must be reformed.

Read more

06-11-2018 03:06pm

North Korea & Denuclearization—Rational Actor, or Unbalanced Risk-Taker?

Could history made in the spring continue through the summer? After tense missile tests and discussions of “bloody nose” strikes, the Korean peninsula has been experiencing a period of unprecedented diplomacy.

Read more

06-11-2018 09:06am

Survey on North Korea Diplomacy : Americans, South Koreans Want Diplomacy Rather Than Military Engagement

In a new survey by the Charles Koch Institute and Real Clear Politics, Americans and South Koreans overwhelmingly agreed that they do not want to pursue military action against North Korea, whether or not the June 12 summit is successful in securing denuclearization of the Korean Peninsula.

Read more

Sign up for updates