Everyone is talking about and expecting self-driving cars to be on the road by 2019. One of the side effects of self-driving cars should be less accidents. According to a study done by the accounting firm of KPMG, the coming technology of autonomous cars could bring an 80% reduction in accident frequency by 2040.
The accounting firms states this reduction in auto accidents will result in a potentially drastic reduction in loss costs and premiums. However, accident expense could go from $14,000 per accident to $35,000 as the self-driving cars have more expensive technology that can be damaged in accidents. They claim the normal insurance company business model will be flipped upside down. Autonomous cars under Google logo crossed the million-mile logged mark. In January, 2016, Apple registered the domain name Apple.Car.com. Apple expects to turn out cars by 2019. Apple has hired more engineers from 600 to 1800 for jobs related to the autonomous auto.
94% of industry survey respondents say actual policy coverage will change 52% saying property coverage will change and 71% expecting coverage to change reflecting costlier vehicle part replacement. KPMG among the same data found competition for insurance policies will “rev up”. Niche insurance companies will handle 42% of the market. New providers falling to 39% of the market and consolidation in store for 29% of the providers.