Personal injury insurance, compensation and rehabilitation schemes whose operational models do not reflect the rise in autonomous vehicles and the sharing economy risk collapse, according to a transport expert.

Melbourne University researcher Jason Thompson told insuranceNEWS.com.au insurers must consider future scenarios including autonomous ownership rates, fleet sizes and risk associated with crashes. He says modelling of autonomous vehicles suggests fewer vehicles will be on the roads, which will decrease the number of compulsory third-party premium revenues.

“Suddenly, potentially you have a mismatch between the personal injury premium revenue and the cost of road trauma,” Dr Thompson said.

Australia currently records an estimated $5 billion in annual injury costs.

“The problem is the transition period where you have, for example, 25% of autonomous vehicles on the road, and then you have a whole lot of people in their normal cars,” Dr Thompson said. “Currently there is no distinction between high and low-risk drivers, everyone is insured regardless of actual risk profile.”

A reduction in compulsory third-party premium revenue could push up premiums for those without access to autonomous vehicles, creating an uninsurable “self-driving” population.

Dr Thompson says personal injury insurers need to prepare new models now to avoid repeating previous debacles caused by major changes to the transport system, such as the 1986 collapse of Victoria’s Motor Accident Board.

“At closure, the board experienced widespread fraud, provided poor support for injured people, held outstanding liabilities of $2.6 billion, and had revenue shortfalls of more than $200 per registered vehicle,” he said.