Driverless Carsí impact on Auto Insurance Industry
I definitely agree that the challenge with driverless cars will be accepting them as a society, but as production costs come down, I think more people will embrace them—either purchasing them outright, or booking them on a per-use basis, the way we rent cars today— much like the widely-accepted zipcar sensation.
Aside from acceptance, another big hurdle to take into consideration is the potential impact on the insurance industry. Since the concept of "distracted driver" will cease to exist—fewer accidents and consequently lower insurance rates—DUIs, Driver's Ed, and collision insurance will become a thing of the past.
Again, we won't see this all come together for about another 15 years out, but testing is currently active and technology is gradually emerging and bits and pieces are starting to surface in the marketplace. Since about 75% of auto insurance is linked to collision and liability exposures, that revenue will steadily start to decline leaving the auto insurance industry staring at a fresh, new landscape. Insurers' primary revenue streams will shift from personal lines to commercial lines—and I predict we will see new, unconventional vendors (such as an Amazon.com) retool their offerings to compete for the remaining 25% of the personal auto insurance business-- comprehensive coverage that takes care of things like natural disasters and theft.
-Valerie Raburn, vice president and chief innovation officer for the insurance division of Xerox.