Innovative partnerships and client proximity are essential to navigating the digital future, according to a new report from Munich Re.

Report author Ludger Arnoldussen says three-quarters of Munich Re clients believe digitalisation will dramatically change the insurance industry.

He cites the example of autonomous cars to emphasise the need for inventive partnerships.

Munich Re research shows 85% of clients predict in just 15 years a quarter to half the cars on our roads will be autonomous.

Mr Arnoldussen says while new driver assistance systems work and “promise fewer accidents”, the technology is not infallible, which puts pressure on insurers to understand it.

“Insurers will need to have technical know-how to understand the risks.”

Mr Arnoldussen says autonomous vehicles will depend on external data supply, and therefore carry cyber risks.

He says after an accident in which the drivers are not to blame, they will still need to be compensated.

“It will be a question of, was it a technical unit or a software error or was it driver error?”

Mr Arnoldussen says autonomous cars will increase manufacturer liability, and producers will have new responsibilities along with suppliers and third parties. 

He says wearables, smart homes and digitalisation will “touch every aspect of our lives”.

The annual cost of cyber crime is about $US445 billion ($615.7 billion) and attacks are constantly changing, unpredictable and potentially devastating.

Mr Arnoldussen says solutions can only be achieved through close consultation with clients and “exchanging know-how and ideas with external partners”. 

He cites Munich Re’s partnership with a Silicon Valley company on a pandemic cover for Middle East respiratory syndrome as an example of insurers teaming up with other industries.