If autonomous vehicle technology is adopted at a moderate pace, United States car insurance premiums could decrease by 20 percent by the year 2035, compared to their 2015 levels, and by more than 40 percent by full adoption in 2050, says a new report from London-based Aon Benfield, the global reinsurance intermediary and capital advisor of Aon plc.
The company’s annual Global Insurance Market Opportunities report examines the key areas of potential growth and disruption for insurers with the growth of the autonomous market.
“Adoption of autonomous vehicles will of course be affected by many variables such as regulatory challenges, cost to the consumer, safety, vehicle ownership preferences, and the technology itself,” says Paul Mang, CEO of Aon Analytics. “However, we as an industry need to act quickly to ensure that we have the products available to align to the new paradigm; if we fail to do so, we only invite disruption.”
If the current pace of market growth is maintained, Aon Benfield forecasts that by 2020 global cyber premiums could reach $10 billion.
In terms of potential disruption, the report also says that in 2015 there was $2.6 billion of investment across more than 200 insurance startups, part of $9 billion invested in the sector in the past several years globally.
The Global Insurance Market Opportunities report suggests that insurers should perform a careful examination of their own value chain, with the aim of evaluating core strengths and identifying weaknesses. Firms should also think carefully about how data and analytics can be applied to serving clients and reorganizing core operations.
To view the full report, click here.