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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) by AnonymousCowardNoMore on Friday July 31 2015, @07:01PM

    by AnonymousCowardNoMore (5416) on Friday July 31 2015, @07:01PM (#216479)

    I doubt that's universal but fair enough, you are correct wherever the law is written that way.

  • (Score: 2) by frojack on Friday July 31 2015, @07:45PM

    by frojack (1554) on Friday July 31 2015, @07:45PM (#216504) Journal

    Insurance is regulated everywhere.
    There is enough competition in the insurance market (for now) to insure rates would come down if claims come down.
    There isn't any valid statistics to suggest there will be fewer accidents or less serious accidents until driverless cars comprise a much larger percentage of the fleet.
    Somebody has to repair those things. Those costs could be very high, at least as high as conventional cars, because. Who re-certifies the the driverless system after a fender bender? Joe's Bodyshop? I don't think so.

    People who glibly assume away all accidents in a driverless fleet are idiots.

    --
    No, you are mistaken. I've always had this sig.