Insurance Journal said a new report from Moody’s Investors Service noted that while self-driving cars will likely force auto insurers to rethink their business models, widespread adoption of this technology is still decades away, allowing insurers plenty of time to adapt. But in the near term, accident avoidance technologies will have a more immediate and positive impact on auto insurers.
Moody’s report noted that once self-driving cars are mainstream, accident frequency will fall sharply, translating into significantly lower premiums and, consequently, lower profits for auto insurers. The industry impact could be dramatic over the very long term given that personal auto is the largest property/casualty insurance line in many countries, including the U.S.
Despite the uncertainties self-driving cars cast over the auto insurance industry, insurers have time to innovate and diversify in order to stay competitive in a potentially narrower market, Moody’s said. Significant industry changes will likely occur, including consolidation, failure and the potential rise of new entrants as self-driving cars have a transformative impact on the global auto insurance industry.
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