Autonomous Vehicles' Means New Opportunities for Auto Insurers
A World of Driverless Cars is Fast Approaching
How can Insurers Benefit from Autonomous or Semi-Autonomous Vehicles?
How can Insurers Benefit From Autonomous or Semi-Autonomous Vehicles?
The idea of an autonomous vehicle has quickly moved from a futuristic concept only to be seen in movies – to our reality. Currently on the market are semi-autonomous cars, like the Tesla Model S with “Autopilot”. The autopilot feature uses radar, cameras, GPS and sensors to keep cars within lanes and maintaining safe following distances and is intended for highway use, where driver is able to take over at anytime. The Tesla is just one example of what is on the market, and with virtually every automaker working on and developing self-driving models, it is forecasted that driverless cars will be in use all over the world by 2025.
Where does that leave the “driver”? Drivers are now the passenger in their own vehicle, and with their hands freed up, the demand for connected car services will increase exponentially. For insurers this means capitalizing on the trend with value-added services offered through insurance. Every insurer that has a usage-based insurance (UBI), pay how you drive (PHYD) and mile-based auto insurance offering, has the opportunity to offer a full suite of value added services to enhance the occupants experience in an autonomous or semi-autonomous vehicle. The days of offering a driver a discount based on their driving behaviour or on a mile driven program will no longer suffice in attracting low-risk drivers and enhancing customer loyalty. The availability of services and offerings will become increasingly important to consumers when making decisions about their vehicles and their insurance carrier.
For insurers, the outlook is bright: during the next five years, the proportion of new and existing vehicles equipped with 4G LTE will grow substantially, and by 2020 a quarter billion connected vehicles will be on the road, enabling new in-vehicle services and automated driving capabilities, according to Gartner, Inc. Autonomous and connected cars will be a major element of the Internet of Things (IoT) and the demand for value added services will continue to grow.
Drivers are going to want the same level of access from their vehicle as they have at home or in their offices. They will want to spend their traveling time, working, shopping, banking, relaxing or accessing entertainment. Services like vehicle maintenance, traffic, fuel price, weather, parking, flight, travel and streaming content will become must-haves for drivers and their passengers.
For insurers getting the business of a driver with an autonomous car will be key. With autonomous cars proven to be safer to navigate, and having a lesser likelihood of getting into accidents than the traditional car of today, insurance companies will benefit in insuring them. Offering a suite of value added services today will not only result in an engaged customer but can also go a long way in terms of keeping your business at the forefront for future business as connected and autonomous vehicles continue to rollout and become mainstream.