autonomous vehicle

Nothing is certain anymore (not even in insurance)

14 December 2017

cothinking
Insurance
connected company
Financial Services

At the end of October, around 200 customers, professors, students, IT experts and other guests gathered in Ghent for our event, ‘Co-Thinking about the Future’, to consider the technology of the future. You will find a number of ideas and topics discussed during the event in this series of blogs.

05_foto selfdriving car.jpg

Nothing is certain anymore (not even in insurance)

Who is liable if a self-driving car causes an accident? And who on earth fills in the accident report? And then there’s car insurance… Who will you pay to insure your car in the future? An insurance company? The garage that fixes it? Amazon?

These burning questions – and a few less urgent ones – are the kinds of things that come up when you sit specialists from the world of insurance around a table to think about the future.

Each their own way

Even the smallest of children understands that the arrival of autonomous vehicles has considerable consequences for insurance companies. After all, the question of liability always arises as soon as there’s an accident. Is the person in the vehicle also responsible for it? And who reports it? Do we leave that for the passenger to arrange, or quickly summons a drone, or always call the police in?
You could resolve some issues by only allowing autonomous cars to drive in ‘corridors’, separate sections of public roads for this type of vehicle. This is already quite common and easy to organise in shipping and aviation, but it’s hardly feasible at all for road traffic. And furthermore: how much room does each type of vehicle need? Self-driving cars will be the exception to the rule to start with, but at some point they’ll inevitably become the norm, and perhaps one day they’ll even be the only vehicles allowed on the roads.

A roadster next weekend, please

And anyway, as one of the participants in the discussion rightly pointed out, these are all solutions for the problems of tomorrow, but Peter Hinssen said this morning that they needed to start thinking about the ‘the day after tomorrow’. What consequences will current developments have in the longer term? What trends will emerge when current innovations – concepts which we don’t hesitate to call revolutionary today – become commonplace? Considering this question immediately resulted in very different insights.

When reports about self-driving cars first started to appear, everyone agreed that this new technology would have a great impact on our mobility. We would start to move around very differently from how we do now. But what nobody realised at the time was that it would turn the entire car industry upside down. Just like we no longer buy CDs or DVDs, and now stream music and films whenever we want, perhaps in the future we won’t even buy cars anymore, and instead just order one when we need one. If the thing can drive itself, it might as well come and pick us up, take us to our destination, and then skedaddle again. When we want to go home, we’ll just order another one. This would mean you could have more variety, too: order a van when you’re going to buy furniture from Ikea, a roadster when you’ve planned a romantic day out with your loved one, and so on.

Insured by Amazon?

All this could have huge consequences for the insurance sector. If nobody actually drives cars anymore, does liability then shift to the owner? But what if nobody owns a car anymore? Is the rental company liable? Or is it the manufacturer who has to cover the costs? Strictly speaking, the invoice could even be sent to the supplier of the software responsible for determining the vehicle’s actions.

Something is happening in the world of insurance

Insurance companies shouldn’t wait too long before they start to consider all this. Whereas it used to be a very stable world with relatively few innovations, things are starting to shift now. Manufacturers are thinking out loud about the new role they could play in this evolution. Why wouldn’t they take on the role of insurance company as well? Because in general you might as well see the insurance simply as an extension of the warranty, which of course demands an extra premium. And who says that companies like Google or Amazon won’t suddenly come up with a new formula for this? As recent developments and takeovers have shown, these technology giants are working hard to secure their futures by looking for more sectors where they can play a meaningful role. You always need to be on your toes with these guys, that much is certain.

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