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posted by CoolHand on Friday July 31 2015, @03:25PM   Printer-friendly
from the don't-tell-them-about-motorcycles dept.

Like record companies at the dawn of online music file sharing, Allstate, Geico, State Farm, and others are grappling with innovations that could put a huge dent in their revenue. As carmakers automate more aspects of driving, accidents will likely plunge and car owners will need less coverage. Premiums consumers pay could drop as much as 60 percent in 15 years as self-driving cars hit the roads, says Donald Light, head of the North America property and casualty practice for Celent, a research firm. His message for insurers: "You have to be prepared to see that part of your business shrink, probably considerably."

Auto insurance has long been a lucrative business. The industry collected about $195 billion in premiums last year from U.S. drivers. New customers are the source of so much profit that Geico alone spends more than $1 billion a year on ads to pitch its policies with a talking lizard and other characters. Yet even Warren Buffett, whose company, Berkshire Hathaway, owns Geico, is talking about the long-term risks to the business model. "If you could come up with anything involved in driving that cut accidents by 30 percent, 40 percent, 50 percent, that would be wonderful," he said at a conference in March. "But we would not be holding a party at our insurance company."

The loss of revenue for the insurance industry gives me a sad.


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  • (Score: 2) by looorg on Friday July 31 2015, @03:38PM

    by looorg (578) on Friday July 31 2015, @03:38PM (#216345)

    Oh yes, how sad. It's not like the insurance industry won't create a whole batch of new insurances that you need or can't live without to replace this potentially lost source of revenue. It will be like hacking-insurance for your self-driving-robot-car etc.

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  • (Score: 2) by Francis on Friday July 31 2015, @03:50PM

    by Francis (5544) on Friday July 31 2015, @03:50PM (#216351)

    There's also motorcycles, ATVs, boats, houses, life and a whole long list of things they can insure. They might not make as much money on car insurance as they have, but it will be much more reliable and less likely to result in large payouts, probably just smaller payouts for things like storm damage. Theft may not even be an issue depending upon how the security is set up.

  • (Score: 0) by Anonymous Coward on Friday July 31 2015, @03:51PM

    by Anonymous Coward on Friday July 31 2015, @03:51PM (#216352)

    t's not like the insurance industry won't create a whole batch of new insurances that you need

    You will also need to re-write all the laws in pretty much all of the states which state you must carry insurance.

    • (Score: 2) by c0lo on Friday July 31 2015, @04:05PM

      by c0lo (156) Subscriber Badge on Friday July 31 2015, @04:05PM (#216361) Journal
      Isn't it the owner that must carry insurance?
      'Cause I guess we are going to see T(ransportation)aaS from Google as ubiquitous as gmail and search. Of course there will be "Azure transportation cloud" (that'll be a lame catchup play), "Johnny Cab - your ever-smiling Uber driver" and "Amazon droning service - tuscan milk and monster cables delivered artificiously intelligent"
      --
      https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
  • (Score: 1) by Ethanol-fueled on Friday July 31 2015, @06:15PM

    by Ethanol-fueled (2792) on Friday July 31 2015, @06:15PM (#216443) Homepage

    The hacking insurance part is funny because you know there wil be government-mandated backdoors in those things...for 'security' reasons.