SoylentNews is people
SoylentNews
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.
(Score: 2) by Daiv on Friday July 31 2015, @06:37PM
The Insurance industry will lobby each Governor HARD to make sure there is a special type of insurance REQUIRED for self-driving cars. Those Governors that accept the payoffs will mandate it for owners in their states and those owners will have no choice.
We can only hope that the process is found out when it starts and make some noise to stop it before it gets enacted.
(Score: 3, Interesting) by Phoenix666 on Friday July 31 2015, @06:50PM
This is right. We're seeing many other industries besides the *AA's and car dealerships trying to lock in their business models with the force of law. Right now in Arizona utilities are trying to essentially outlaw rooftop solar because it cuts into their profit model. The thing is, the more all those industries succeed in locking in their outdated business models in defiance of market reality, the faster they will bring on the paradigm shift that will put all of them out of business at once.
In 50 years historians will be trying to catalogue all these shearing forces to figure out what caused it all to fall apart.
Washington DC delenda est.