Home / Local / Driverless cars set to shake up industry
9 September 2019
The rise of driverless cars will spur demand for “on-the-go” motor cover, according to a global study on the impact of autonomous vehicles on the transport landscape, including in Australia.
UK-based Kennedys law firm, which commissioned the study, says the shift away from annual renewals is just one of many challenges facing the insurance industry.
Issues of liability and data sharing are the other obvious issues that insurers need to sort out.
Head of Liability and Innovation Richard West expects a “profound impact” on insurers as self-driving vehicles become mainstream.
The industry will be required to rethink everything from the development of motor products to data handling to building relationships with car makers.
“Insurers will be faced with strategic challenges in continuing to support the classic insurance model towards new risk models in which the liability moves towards product manufacturers,” Mr West said.
“Insurers will need to develop autonomous vehicle insurance propositions as they see changes in consumer appetite for insurance products.
“We are likely to witness a move away from annual renewals towards on-the-go insurance and the growth of more transactional relationships where less is understood about the risk profiles of individual drivers.”
On-the-go insurance refers to policies that allow motorists to buy short-term cover as, and when, they need it. Such products offer cover from as little as one hour to 30 days.
The study questioned more than 6000 motorists and market practitioners in Australia, China, Hong Kong, Singapore, the UK and the US.
About 48% of Australian respondents interviewed for the report agree most drivers will take out short-term motor cover in the future, but only 26% see themselves as likely to buy it.
Only 30% are comfortable when asked about sharing car data with law enforcement bodies and police officers.
And fewer than 20% say they are less likely to own a car if autonomous vehicles are introduced, while 59% support the concept of partially automated cars.
Slightly over half are not in favour of fully autonomous vehicles as they enjoy driving and don’t want computers to have control.