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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 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.