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: 1, Insightful) by Anonymous Coward on Friday July 31 2015, @03:37PM
Payout would also drop considerably...
(Score: 2, Interesting) by AnonymousCowardNoMore on Friday July 31 2015, @03:48PM
Which could, combined with the mandatory insurance requirements in most locations, mean a massive increase in profit.
(Score: 1, Interesting) by Anonymous Coward on Friday July 31 2015, @04:37PM
Insurers are required by law to limit their overhead costs i.e. anything that is not a paid insurance claim. If they want more profit, they have to pay out more and charge more to keep their overhead the same percentage of revenue.
(Score: 1) by AnonymousCowardNoMore on Friday July 31 2015, @04:52PM
Overhead costs are things like salaries and office supplies. Profit is not a cost.
(Score: 0) by Anonymous Coward on Friday July 31 2015, @06:00PM
In accounting, no. In insurance law, yes.
(Score: 1) by AnonymousCowardNoMore on Friday July 31 2015, @07:01PM
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
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.
(Score: 0) by Anonymous Coward on Friday July 31 2015, @06:49PM
There are hazards other than collisions (flood, tree falling, windshield nicks, door dings) to be insured against if the car is new, especially if there is a loan on it. Also, if self-driving cars reduce collisions and lower insurance costs, more people may actually buy insurance. In California, the requirement for insurance is very poorly enforced - if you don't have a loan, there only impediment to driving uninsured or underinsured is risk of discovery. Discovery is only likely in the event of a significant collision. Traffic stops include a cursory check for a piece of paper saying that you are insured - I have never heard of anyone checking the veracity of that paper. If insurance becomes inexpensive, perhaps many more people will buy it.
(Score: 2) by captain normal on Friday July 31 2015, @10:21PM
Actually in Cal, you have to show proof of insurance when you pay your car registration every year. The companies that carry vehicle loans require collision and comprehensive coverage. If your car is paid for and think you can carry your on collision repair or your car isn't worth the cost of the insurance you only have to carry the required liability insurance.
Everyone is entitled to his own opinion, but not to his own facts"- --Daniel Patrick Moynihan--
(Score: 2) by looorg on Friday July 31 2015, @03:38PM
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.
(Score: 2) by Francis on Friday July 31 2015, @03:50PM
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
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
'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
The hacking insurance part is funny because you know there wil be government-mandated backdoors in those things...for 'security' reasons.
(Score: 3, Insightful) by c0lo on Friday July 31 2015, @03:40PM
If the self-driving car proves to be safer in real-world conditions.
I'll guarantee you this includes the firmware. Have a look over the last 30 years of personal computers and tell me honestly that you believe a complex software (as the one to handle the road in any weather/traffic conditions) will be bug free and security hardened.
As sure as death and taxes, you won't catch me as an early adopter, thank you very much.
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 3, Insightful) by Tork on Friday July 31 2015, @03:58PM
🏳️🌈 Proud Ally 🏳️🌈
(Score: 2) by tempest on Friday July 31 2015, @04:51PM
If AI can't react to each other properly, then there's no way they can judge human drivers properly and that's going to be a prerequisite for a while. Eventually I imagine we'll have something like a Vehicle Communication Protocol, where two vehicles aware of each other communicate (via wireless or whatever), indicating status and intent, which would boost accuracy considerably compared to vague reactionary systems required now.
(Score: 2) by Tork on Friday July 31 2015, @05:05PM
If AI can't react to each other properly, then there's no way they can judge human drivers properly and that's going to be a prerequisite for a while.
Sorry to be nitpicky, but this is not true. The software being designed to deal with human drivers. If automated cars drive differently than humans then it has to be tested against the new behaviour. Either these companies will need to work with each other to iron this out before the production phase, or the rules of how to handle certain events will have to be regulated by a governing body.
🏳️🌈 Proud Ally 🏳️🌈
(Score: 1) by timbojones on Friday July 31 2015, @05:48PM
To the extent that automated cars will drive differently than humans, they will be more predictable with fewer outliers. Automated cars will not present entirely new driving strategies -- their strategies will be a subset of human driving strategies.
Automated driving software is being designed to deal not just with human drivers, but with human cyclists, pedestrians, streetcars, school buses, construction detours, falling trees, balls rolling into the street, birds swooping across the windshield, a woman in an electric wheelchair chasing a duck in circles in the middle of the street. They are being designed to deal with any moving or stationary road hazard of any size.
Other automated cars will present zero challenge and zero surprise.
(Score: 2) by Tork on Friday July 31 2015, @06:08PM
To the extent that automated cars will drive differently than humans, they will be more predictable with fewer outliers.
I don't think that's a safe assumption, especially when you factor in that robotic reaction time is different from human reaction time. That alone will deviate the behaviour enough to require extra rounds of testing. It'll likely mean more software updates during the life of each car as well.
Other automated cars will present zero challenge and zero surprise.
I hope you end up being correct, but I've heard similar arguments against sanitizing inputs on web-facing code.
🏳️🌈 Proud Ally 🏳️🌈
(Score: 2, Insightful) by timbojones on Friday July 31 2015, @07:15PM
True, but irrelevant. The car is still a car with a car's momentum and maneuverability. An automated driver needs to respond to a car swerving regardless of whether the human driver is reacting to something that happened a second ago, or another automated driver is reacting to something that happened a tenth of a second ago, or the car itself blew a tire just now.
(Score: 2) by tempest on Friday July 31 2015, @07:09PM
While I sort of agree that AI might drive differently than an average person, I don't think we'll really know until AI has a track record. But I think AI cars will be far more predictable, even if different than humans, because it's nearly impossible to group humans together as driving one way. Teenage punks, girls texting, drunks, old folks, and "normal drivers" all drive completely differently and inconsistently. Not accounting for random other factors, like the time my girlfriend smashed into a curb because there was a bee in her car. Computers are generally kept fairly simple, as in keeping it on the street between the lines obeying traffic rules and not hitting things. Unfortunately humans are often not concerned with these things like they should be and can't be expected to even act in their own safety.
I think you're very right about new protocols will be needed first. I'd guess that will eventually fall to a regulated body of some sort. Especially when these cars will have to decide how to weight human life and damage in scenarios where there is no "safe" option. Thus far I can't recall anyone stepping up to the plate to handle this yet, so I'm guessing we'll have to wait for a disaster to make news headlines.
(Score: 0) by Anonymous Coward on Friday July 31 2015, @09:29PM
I think that a communication protocol would not be necessary for safety but it would be beneficial for improving efficiency given the same degree of safety. Without such communication a car would have to be much more conservative assuming and planning for the worst case scenarios and taking the (less efficient) path that would be safe under multiple different possible scenarios because it doesn't know the intent, status, location, and orientation of surrounding cars. With such communication then cars can collectively coordinate the most efficient scenario and no longer have to assume the worst case scenarios (or take into account multiple possible scenarios) since they can plan for and hence know the scenario ahead of time.
(Score: 1) by tftp on Friday July 31 2015, @05:15PM
I can already imagine a new class of "pranks" - to hack into that protocol, stand on an overpass with a pocket transmitter, press the button, and watch the chaos down below as cars are advised of "intents" to cut each other off, suddenly brake, etc.
One would think that the protocol would have to be very robust if the vehicles are to trust each other. Not only the transmission must be cryptographically signed; the key must be in a tamper-proof storage that cannot be desoldered and used elsewhere. The vehicles probably also want to accompany their intents with something else that they know of but that is pretty hard for a prankster to collect - such as visible locations of nearby cars, for example.
One possibility is to use vehicles' cameras for purposes of optical communication. But currently the frame rate is abysmally low. There is also blocking of light by obstacles and rain/fog. Short range radio (in tens of GHz) will work within a hundred meters, and you don't need more than that anyway. But ultimately this is how it will be. Today drivers are just have to read subtle hints to predict intentions of other drivers. An autonomous car will just know ahead of time.
None of that will entirely eliminate accidents, though - a pedestrian can always jump into traffic.
(Score: 2) by tempest on Friday July 31 2015, @06:46PM
I don't think cars would communicate directly, although in an ideal non hostile world that would be easiest. Instead I'd guess we'd have something like the browser CA system, where cars register via the mothership authority and pass signed messages to the third party where they are signed and authenticated. Pulling the message computer out I think would be the biggest issue to worry about, but this seems like something that would be keyed to the engine, like transponder keys currently do with anti-theft systems.
It makes me cringe thinking about the privacy implications, but it seems like everyone can't throw that away fast enough these days, especially if they offer it via Twitter integration so people can see real time status updates like "I just started my car."
Assuming we're not all chipped by then too :-/
(Score: 1) by tftp on Friday July 31 2015, @07:10PM
I'd guess we'd have something like the browser CA system, where cars register via the mothership authority and pass signed messages to the third party where they are signed and authenticated.
I don't think this will work at all. We do not have enough of wireless bandwidth. Usable frequency range is only somewhere from 1 to 3 GHz, and you need some small latency - which implies high data rate, and you need guaranteed service, and you do not want handoffs, and you don't want towers every 100 meters along highways - it's just too expensive and unreliable. On every morning there are 100 million cars on the road - what kind of a third party can receive that, let alone to forward to those who "subscribed" - and those subscriptions constantly change, as cars are moving and their areas of interest vary as well.
Compared to that, peer to peer networks are naturally self-organizing, as if a car hears another car it has a business to hear it. The latency is defined only by the packet length. Privacy is not affected because if you can hear a car you can also see it with your own eyes; the cars do not broadcast more than what will be obvious a few seconds later (like "I'm about to take this exit.")
The mesh also solves the problem of infrastructure. There is no way to cover the whole country with a network of towers. Most of the roads do not have any power whatsoever [google.com]. Cars on such a road will be able to communicate even better than in a city.
(Score: 2) by tempest on Friday July 31 2015, @07:25PM
I think you're right about the latency, but as for bandwidth I think the very first thing people will demand when having cars drive themselves will be internet access in their car. If we don't have the bandwidth now, it will likely come with growing demand. That assumes we use existing infrastructure, so maybe the cars will talk to receivers built into the roads themselves. Something like a smart highway that kept track of temperature, road conditions, traffic congestion as well as allowed nearby cars to talk to each other. It could be that once a car has authenticated with a section of road, it is allowed to message other vehicles directly. Like kerberos tickets. Obviously due to many factors not all roads would be covered, but cities and major highways could be. At other times the AI would default to the reactive mode used today.
(Score: 1) by tftp on Friday July 31 2015, @08:23PM
as for bandwidth I think the very first thing people will demand when having cars drive themselves will be internet access in their car
They can demand all they want, but Shannon's Law [wikipedia.org] will be a problem. It's like demanding that one could jump up and reach the Moon. Good luck with that.
Furthermore, there is NFW that the consumer's Internet access and the real time driving information would be sent over the same link.
maybe the cars will talk to receivers built into the roads themselves
You can go that way, but it will take time and money - and I don't think anyone has enough money to upgrade all the roads. I'd be happy if they just add a lane or two, forget the radios.
It could be that once a car has authenticated with a section of road, it is allowed to message other vehicles directly. Like kerberos tickets.
Authentication with the road is kinda pointless here, as the road does not do much, and it's unclear why it would be a trusted authority. It's much easier to give OEMs (Ford, Toyota, etc.) the CA keys, and tell them to sign keys of the vehicles that they make. With key revocation over the air, once per day, this should be both secure and sufficient. Then the cars can talk to each other on all roads, not only on upgraded ones. And outside of roads as well - plenty of construction and agricultural machinery operates there, and automatic functions there are even more important because the job is so repetitive, like plowing the field from here and until the Sun sets. Collisions with farm equipment are not all that rare either.
(Score: 2) by Francis on Friday July 31 2015, @06:07PM
A lot of it is surprisingly straightforward, the car keeps at least 2 seconds behind the next car as long as it can do so at a safe speed. The car needs to watch out for lane intrusions and slow or speed as appropriate. Which is a pretty limited number of reactions necessary to get along with other cars.
Obviously, the actual execution of it is difficult, but realistically, the things human drivers do that cause crashes are generally a lot more easily identified than one might imagine. The motorcyclists, bicyclists and pedestrians are a much bigger problem though.
(Score: 2) by etherscythe on Friday July 31 2015, @05:55PM
I think it will have a lot more to do with not being able to judge the road itself. Until Machine-Intelligence-compatible roadways which are only driven by computers are built, they will have many of the same problems we do - faded lane paint with missing reflectors, erratic drivers, black ice, small debris in the road, pedestrians, etc.
"Fake News: anything reported outside of my own personally chosen echo chamber"
(Score: 2) by dcollins on Friday July 31 2015, @06:44PM
High Frequency Transportation, aka Flash Crash
(Score: 0) by Anonymous Coward on Friday July 31 2015, @04:06PM
I agree. But I do like the idea of a self driving car that keeps me from falling asleep at the wheel and keeps me on the road until it can get my attention.
(Score: 2) by c0lo on Friday July 31 2015, @04:21PM
Would you consider a hooker keeping you awake by blowing you? No worries, it will be affordable.
Seriously, if passengers cars can do it on their own, the entire ground transportation sector can. Expect large unemployment and great price drops for other services.
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 1, Insightful) by Anonymous Coward on Friday July 31 2015, @04:42PM
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.
(Score: 2) by forkazoo on Friday July 31 2015, @06:29PM
It doesn't need to be bug free. It just needs to be less buggy than using average repurposed thinking meat (that wants to get laid, and is rushing to avoid getting fired) wired to looking meat (that needs to blink constantly to stay wet since it was designed for ocean use, and only perceives a small subset of the spectrum in which other cars are mostly opaque, and can only look one direction at a time) wired to moving meat (which fatigues, is hungry and maybe effected by being drunk) to try to make safe decisions at 60 miles an hour. Humans are awful at situational awareness, reliable data processing, estimating the physics of potential courses of action, having fast reflexes, and retaining training data. Almost everything that goes into being a good driver is something that computers are better at.
Remember that if Google cars intentionally murder 20,000 people every year purely as a blood sacrifice tax, we'll still probably come out ahead vs. the 40,000 people we currently murder by letting meat be responsible for driving.
(Score: 0) by Anonymous Coward on Saturday August 01 2015, @12:55AM
The original "If".
If— By Rudyard Kipling
If you can keep your head when all about you
Are losing theirs and blaming it on you,
If you can trust yourself when all men doubt you,
But make allowance for their doubting too;
If you can wait and not be tired by waiting,
Or being lied about, don’t deal in lies,
Or being hated, don’t give way to hating,
And yet don’t look too good, nor talk too wise:
If you can dream—and not make dreams your master;
If you can think—and not make thoughts your aim;
If you can meet with Triumph and Disaster
And treat those two impostors just the same;
If you can bear to hear the truth you’ve spoken
Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to, broken,
And stoop and build ’em up with worn-out tools:
If you can make one heap of all your winnings
And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings
And never breathe a word about your loss;
If you can force your heart and nerve and sinew
To serve your turn long after they are gone,
And so hold on when there is nothing in you
Except the Will which says to them: ‘Hold on!’
If you can talk with crowds and keep your virtue,
Or walk with Kings—nor lose the common touch,
If neither foes nor loving friends can hurt you,
If all men count with you, but none too much;
If you can fill the unforgiving minute
With sixty seconds’ worth of distance run,
Yours is the Earth and everything that’s in it,
And—which is more—you’ll be a Man, my son!
(Score: 2) by takyon on Friday July 31 2015, @03:59PM
Scale the premiums to match the reduced risk of accidents.
In the interim period in which driverless cars share the road with many human drivers, accident rates will still be high on average, but the driverless car itself will be an incredibly "safe driver" for the insurance company.
[SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
(Score: 2) by Runaway1956 on Friday July 31 2015, @04:06PM
I thought that insurance companies ARE MATH. Everything they do is by the numbers. Everything they offer is dictated by the numbers. They've got the statistics pegged, for almost everything. If/when they take a big loss, in a catastrophe such as major flooding, they just re-work the numbers. They may lose a little in the short run, but in the long run, they will always win.
(Score: 0) by Anonymous Coward on Friday July 31 2015, @04:18PM
Nope you are certainly mistaken. In most cases the business people decide what they want to price the product at, and have the Math people come up with a formula that closely approximates it. Yup I know.... but the price is always so much more than they would ever pay out that it doesn't really matter.
(Score: 0) by Anonymous Coward on Friday July 31 2015, @04:44PM
Insurance is merely a bet that you will be the unlucky one.
(Score: 0) by Anonymous Coward on Friday July 31 2015, @04:52PM
In the interim period where robots share space outside of containment cells with humans, crime rates will still be high on average, but robots themselves will be incredibly good citizens for the government.
(Score: 2) by Fnord666 on Friday July 31 2015, @04:00PM
(Score: 2) by mr_mischief on Friday July 31 2015, @04:04PM
The insurance companies aren't car insurance companies or life insurance companies for the most part any more. They mostly will sell you car insurance, homeowners' or renters' policies, life insurance policies, professional liability, and more.
There's more to car insurance than liability and collision. There's theft, act of nature, vandalism, etc. They often combine most coverages into "comprehensive".
If cars are much safer, then the chances of paying out should go down. The amounts paid out per accident should also go down.
You folks should realize one of the biggest proponents and participants for car safety testing, rating cars for safety relative to one another, and pushing government for safety regulations is the Insurance Institute for Highway Safety. They want smaller risk so they can invest more of your policy float.
(Score: 2) by WillR on Friday July 31 2015, @04:44PM
(Score: 3, Interesting) by MichaelDavidCrawford on Friday July 31 2015, @04:37PM
It's kinda nice, getting to know a new friend or two while TriMet MAX zips past the ten-mile long traffic jam on I-5 in North Portland from early morning until mid-evenin, with only a modest lull around noon.
Those people are coming from or going to rural Clark County - Ridgefield, Battle Ground, Camas, La Canter, Hazel Dell and Salmon Creek where I live. Very few Vancouver residents work in Portland, they work in Vancouver.
There are lots of jobs in Clark County but not many tech jobs. There are a few very large employers like Wacom, Sharp Labs and Kyocera Industrial Ceramics, but only a few. There are a few small shops lke the one I work for but again only a few.
I am very fortunate to have found a local job; since 2010 I have been searching for work in Portland, because I actually want to live in Portland. Its important to me that I can walk to work.
Intel, Mentor Graphics, Tektronix, Microsoft and many other large firms are in Portland Metro. The is a huge support system for Intel - companies that sell Intel the toys its Fabs require.
There is an uncountable infinity of small shops, mostly mobile and web startups.
Skyrocketing Portland rents and real estate prices lead the Clark County Commission to encourage residential development here. To the best of my knowledge I myself am the only one working in any diligent way to promote tech in South-West Washington. The library does not want my donation of technical books. If I want to read O'Reilly or Addison-Wesley in a library I have to go to the Multnomah County Library in downtown Portland.
I am unclear as to why but C-TRAN runs only two busses on weekdays, none on the weekend, to Camas and Battle Ground. Hazel Dell and Salmon Creek have modestly acceptable bus service but it is clear to me those busses are not intended to serve those who actually live or work here.
There is a huge high school just down the street from me; in Portland all the kids get to school on TriMet. In Hazell Dell and Salmon Creek they drive there cars.
I am absolutelt serious that No One Walks In Salmon Creek ither than I. I have a good friend who rides his bicycle; everyone else drives.
I love Salmon Creek but I really will move into Portland because the busses in Salmon Creek dont get me where I want to go.
The political opposition to public transit doesn't make a whole lot of sense. The Columbian's Letters To The Editor are often floridly delusional. After a while I figured the car dealers were writing them.
No.
The Insurance Company.
I don't have auto insurance because I don't have a car. No car payments, no gasoline, no maintainence, no unexpected major repairs. I dont search or pay for parking.
I spend about fifty bucks per month on bus and train fare. It's also much safer than driving a car.
The I-5 bridge over the Columbia River is in desperate need of replacement but the Columbia River Crossing recently collapsed after one billion dollars and twenty years of planning because Washington refused to pay for its share of light rail into downtown Vancouver.
The real solution is to ride the busses we've already got. That will take cars off the road and provide funding for additional busses - that Virtuous Spiral that Jean-Louis Gassee always goes on about.
The way to accomplish that would be to serve the people who actually work in Clark County but because the C-TRAN Commission is dominated by real estate developers they wont permit that:
Houses sell for more money if they have a driveway and a two-car garage.
Mom loves the bus she loves the train but even sonI cannot convince her to actually ride them. She drives her car to places that I ride the bus to.
Yes I Have No Bananas. [gofundme.com]
(Score: 2, Touché) by timbojones on Friday July 31 2015, @05:52PM
As a resident of Seattle and a Portland native, I offer you a formal apology for the asshats in Eastern WA who don't seem to realize that urbanites are subsidizing their parsimony.
(Score: 1, Informative) by Anonymous Coward on Friday July 31 2015, @07:03PM
The value that automated cars offer is the possibility that people can ride on demand to the exact places they want instead of having to ride in groups to places that are merely close to where they want to go. Automated cars can replace bus and taxi drivers, and make it economical to offer individual car service on demand. They will expand the number of people who don't want to own a car.
(Score: 2) by Aichon on Friday July 31 2015, @06:11PM
Their revenues will be shrinking because their costs will be shrinking, due to there being less claims on driverless cars. It doesn't change the amount of profit they're making in the slightest.
Quick example: suppose driverless cars will cut the cost for claims they pay out in half. Of the, say, $70 I pay per month, let's say that $50 goes towards paying out claims, while $20 is pocketed as profit. If their costs dropped in half, they could charge me $50/mo., could pocket $25 in profit for an extra $60/year, and I would still be a very happy customer since I'd be saving $240 annually.
Just because their revenues may shrink, it doesn't necessarily mean they'll be making any less money in profit. This is a definite win for consumers, since insurance costs will drop like crazy, and it'll be a big win for any early movers on the insurance side, since those lower rates will look extremely attractive to potential new customers considering a switch to a new insurer. Latecomers stand to lose big.
(Score: 2) by morgauxo on Friday July 31 2015, @06:26PM
So long as getting run over by a car is harmful to a human being and so long as there is any amount of owner-control of a car there is still a huge liability issue. If I do something that results in my car harming another person or their property I may be sued. So.. we will still be required by law to carry insurance and honestly we will still need it because who can afford all those hospital bills if the worst does happen?
If anything I would think insurance companies would stand to gain because having to give payouts would become rare.
On the other hand if cars become completely, 100% automated then all that liability shifts to the auto makers. It seems likely that they will want to buy insurance. So, insurance companies will be competing for a much smaller group of customers but those customers will collectively need insurance for the entire load of liability that drivers once were burdened with! I would imagine that insurance companies would begin acquiring one another until there were only a few left but those few would be making all the money.
That's pretty speculative though, to think that all driver liability will go away.
(Score: 3, Insightful) by Anonymous Coward on Friday July 31 2015, @06:29PM
Like record companies at the dawn of online music file sharing, Human head lice, Roundworm, Tapeworm, and others are grappling with innovations that could put a huge dent in their non-mutual symbiotic relationship. As host organisms automate more aspects of living, parasitic activity will likely plunge and hosts will need less coverage. Premiums consumers pay could drop as much as 60 percent in 15 years as advanced serum protiens hit the roads, says Donald Light, head of the North America property and casualty practice for Scolent, a research firm. His message for insurers: "You have to be prepared to see that part of your business shrink, probably considerably."
Parasitism has long been a lucrative business. The industry collected about $195 billion in premiums last year from U.S. human hosts. New hosts are the source of so much profit that Hookworm alone spends more than $1 billion a year on ads to pitch its policies with a talking scolex and other characters. Yet even Warren Buffett, whose company, Berkshire Hathaway, owns Proglottidco, is talking about the long-term risks to the business model. "If you could come up with anything involved in parasitism 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 infectious disease company."
The loss of revenue for the Cestoda 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.
(Score: 2) by SecurityGuy on Friday July 31 2015, @07:05PM
Yes, disruptions are disruptive. This is really fairly unremarkable, unless you're in the insurance industry, in which case you should probably consider a new career sometime in the next 5-40 years.
(Score: 0) by Anonymous Coward on Friday July 31 2015, @07:52PM
(Score: 1) by maliqua on Friday July 31 2015, @09:04PM
The cost of insurance will just be bundled into the cost of the car and the manufacturers will likely be the ones carnying the insurance. But the insurance will still be paid.