Car accidents are expected to decrease by 80% in 2040, but more importantly, this will have different effects for the future of car insurance premiums, and with the development of the car industry at a faster pace than ever before and with digital driving and the emergence of driverless cars, insurance companies must You begin to prepare for change.
A study of “Depot” company expected that the annual premiums will be reduced by 30% in 2040, while KPMG expects the market to shrink by a whopping 60%, so it is no wonder then that there is uncertainty about the future of insurance on Cars, according to a report by the “Auto Keys” site, there are 7 future variables that can be listed as follows:
1- A decrease in personal car insurance
In today’s environment, car sharing is becoming more popular, as is transportation on-demand as it appears that passenger applications such as “Uber” are already dominating the market and there are more environmentally friendly means of transportation that will bring more and more people to choose joint mobility.
2- Independent Vehicle Technology
The only thing that monitors can predict in all areas is the emergence of driverless vehicle technology and the truth may be closer than you think. Although fully autonomous cars still represent something in the future, many cars already use some levels of automation Such as speed control, sensors and automobile parking, and with this level of automation increasing steadily the premiums for traditional cars are expected to decrease significantly.
3- A decrease in the frequency of accidents
Statistics show that 90% of car accidents are caused by human error, but the declining role of the human factor makes driving in a safer position on the roads, and it appears that automatic braking sensors and drift sensors are just two reasons for a massive reduction in the frequency of accidents.
4- Transfer of responsibility
Of course, with human error turning into a thing of the past, any accidents related to the vehicle itself are likely, and this means an unavoidable shift in responsibility from drivers to manufacturers, and insurance against software and algorithm defects can become the standard for these manufacturers, which Opens a new avenue for potential revenue.
5- The dangers of cybercrime
The idea of cars connected to the internet is not far away; in the same way that the central heating system can now be controlled from the phone, the driver can do the same with his car one day, but nevertheless, there is a risk where there is a greater chance of being compromised, and security may be Cybercrime is a new trend for insurance companies with the need for new products and services to protect against internet theft, piracy and ransom requests.
6- Increasing average repair costs
The prospects for new and exciting technologies come with a downside, while the cost of insurance is likely to decrease due to improved security features, it appears that the cost of repairs has risen, and these more advanced technologies are more expensive when repairing, and with an additional possibility to import specific parts and systems, the cost The total will only go up.
7- New demographic for drivers
Self-controlled vehicles can open up a whole new market for car insurance companies. Thanks to the safer technology that no longer places the responsibility on the driver, this may aid a demographic change in car owners, especially from the older ones because he is now able to ride a car without having to drive it himself.