The insurance industry is one of those markets where companies tend to have a strained relationship with their customers. In other words, an insurance company wants the insured to continue paying for insurance for as long as possible without raising a claim.

This never goes well when an insured applies for compensation after one of the insured products are damaged or stolen. The level of scrutiny the insurance companies subject the insured to can be torturous and at times it can take several months or even years before a claim is paid.

This has been one of the biggest challenges that the insurance industry faces. However, a lot has evolved over the last few years with insurance companies introducing disruptive products that allow claims to be verified and processed quicker. This has also contributed to the introduction of some of the cheapest insurance products available to property owners including auto insurance, real estate insurance and office furniture, among others.

 Technology has been at the top of most of these developments and it will continue to play a crucial role in the insurance sector for many years to come.

But is there a flipside to technological developments especially when it comes to car tech? This has been one of the biggest questions that insurance industry experts have sought to answer.

Currently, most cars are fitted with the latest car tech including features like cruise control, power steering, automated side mirrors and door locks, and automatic gears, among other peripheral gadgets that make driving easier and possibly safer.

However, the most recent developments seek to take the whole experience of owning a car a notch higher. After the launch of semi-autopilot cars a few years ago, the market is now beginning to embrace a new breed of cars that are completely autopiloted.

Coupled with cab service apps like Uber and Lyft, the transport industry could soon be operated by automated systems, which make things a lot more complicated for auto insurers. One of the biggest revenue drivers for auto insurance companies is personal auto insurance, which basically is insurance against accidents caused by driver error.

The introduction of driverless cars could eliminate this revenue option completely from the books of auto insurers, and in turn, introduce a new one. Auto insurance companies could begin to insure vehicles against potential crimes such as cyber hacking or even computer network downtime. Who knows what else is in store for the coming years?

Furthermore, recent developments in the autonomous vehicles market indicate that unless autonomous vehicle manufacturers adapt to the changing insurance industry trends, people who buy cars from them could struggle to find insurers for their vehicles.

Nonetheless, reports indicate that most autonomous vehicle manufacturers seem rather confident in their autonomous driving systems with some having no issues getting insurance for their self-driving vehicles. As reported by BetaNews, “Volvo is already on board with this approach and is so confident in its technology that CEO Håkan Samuelsson plans to accept liability for its driverless cars when in autonomous mode.”

Statistically, 90% of all road accidents are caused by human error. Taking this out of the equation suggests that there could be a significant decline in road accidents. From a positive side of view, this means that insurances companies won’t be asked to settle claims from the insured as frequent as has been the case over the years. However, on the flipside of things, reduced risk thresholds could also imply that insurance companies will have to charge relatively lower premiums than before thereby affecting their revenues.

Conclusion

Car tech has revolutionized the auto industry and now, developments indicate that the auto insurance industry could be set for a major disruption. There are reports indicating that grocery delivery will now be done using autonomous vehicles, which again reduces auto insurance risk further. The implications of this on company top lines could be huge and this sets the auto insurance market for an interesting future.