By Harshith Ail
Technological innovation has been ruling the present day world. Individuals encounter a new technology in every walk of life. And just when we think innovation has reached its saturation point, we come across a new technology, which was never thought of before. Driverless cars are one such innovation.
Equipped with self-driving mechanism, driverless cars have become one of the most awaited cars in present day world. These cars are currently under road testing and will take around a decade before they are available for the general public. However, it is already being forecasted that this innovation could be a game changer for many industries.
This new technology could bring with itself challenges to insurance companies and regulatory bodies in the countries wherein it is brought to practice. The California Department of Motor Vehicles has raised a concern that "The technology is ahead of the law in many areas" and states that, as per the law, a human being should operate the vehicle. There is hence an argument between policy makers and regulators that a new law should be brought into picture for such a breakthrough technology.
Impact on Insurance Companies
Driverless cars could also have an adverse effect on insurance companies, as these cars are known for their low collision rate. Fewer number of collisions means fewer insurance claims. This will prompt the insurance companies to lower their premiums, which will in turn result in a challenging environment in the insurance market and increased competition. The blend of driverless cars and Usage Based Insurance (UBI) could change the way automobile insurance is operating at present. Moreover, these cars could also affect the ROI of the insurance companies, as these companies will now concentrate more on research.
Driverless cars work using the internet and inbuilt cameras. Hence, there is a possibility that insurance companies could tie up with these device manufacturers to gather data. Insurance companies with legacy applications could face more challenges. It may become necessary for them to upgrade their applications to support these devices. This need translates into an opportunity for the IT industry.
In case these cars come into use, the companies which make the driverless systems will have to bear the blame for accidents, but not the drivers. . On the other hand, general public is with an impression that this can be an alternative for errors on part of the drivers, like drinking & driving, not following lane discipline, etc.
Conclusion
This new technology will make an insurance company to adopt different approaches towards designing their products. It is too early to decide whether it will be a boon or a bane for insurance companies, but, it can certainly be said that automobile insurance will not be the same anymore.
Technological innovation has been ruling the present day world. Individuals encounter a new technology in every walk of life. And just when we think innovation has reached its saturation point, we come across a new technology, which was never thought of before. Driverless cars are one such innovation.
Equipped with self-driving mechanism, driverless cars have become one of the most awaited cars in present day world. These cars are currently under road testing and will take around a decade before they are available for the general public. However, it is already being forecasted that this innovation could be a game changer for many industries.
This new technology could bring with itself challenges to insurance companies and regulatory bodies in the countries wherein it is brought to practice. The California Department of Motor Vehicles has raised a concern that "The technology is ahead of the law in many areas" and states that, as per the law, a human being should operate the vehicle. There is hence an argument between policy makers and regulators that a new law should be brought into picture for such a breakthrough technology.
Impact on Insurance Companies
Driverless cars could also have an adverse effect on insurance companies, as these cars are known for their low collision rate. Fewer number of collisions means fewer insurance claims. This will prompt the insurance companies to lower their premiums, which will in turn result in a challenging environment in the insurance market and increased competition. The blend of driverless cars and Usage Based Insurance (UBI) could change the way automobile insurance is operating at present. Moreover, these cars could also affect the ROI of the insurance companies, as these companies will now concentrate more on research.
Driverless cars work using the internet and inbuilt cameras. Hence, there is a possibility that insurance companies could tie up with these device manufacturers to gather data. Insurance companies with legacy applications could face more challenges. It may become necessary for them to upgrade their applications to support these devices. This need translates into an opportunity for the IT industry.
In case these cars come into use, the companies which make the driverless systems will have to bear the blame for accidents, but not the drivers. . On the other hand, general public is with an impression that this can be an alternative for errors on part of the drivers, like drinking & driving, not following lane discipline, etc.
Conclusion
This new technology will make an insurance company to adopt different approaches towards designing their products. It is too early to decide whether it will be a boon or a bane for insurance companies, but, it can certainly be said that automobile insurance will not be the same anymore.
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