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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: 1, Insightful) by Anonymous Coward on Friday July 31 2015, @04:42PM

    by Anonymous Coward on Friday July 31 2015, @04:42PM (#216382)

    Clearly you have never been a commercial driver. Believe it or not, it does take skill; that undefinable thing which is very hard to replace except in incredibly controlled environments. I

      suggest you take a look around at what commercial drivers actually have to do and you will see how improbable automating the majority of those tasks are. Fully automated software development would be an easier task as that would be a prerequisite for the analyzing, learning, adapting, and flawlessly applying new algorithms to novel problems that transport requires.

    Sure you could automate long haul OTR behavior. But we already did that. It is called a train.

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