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Emerging risks - driverless cars

Nov 16th, 2017

The prospect of self-driving cars on our roads is moving ever closer.

Zurich insurance has recently completed a consultation with a broker panel, when it identified driverless cars as the technological advance that most interested brokers. There has been much speculation about when autonomous vehicles will reach our roads, and what impact they could have on society.

Zurich concluded that plenty of unanswered questions remain, and published an article last week exploring 10 of the key unanswered questions surrounding driverless cars. It is a thought provoking read and so we have linked it here for those that are interested.

The use of driverless cars has several longer term implications for the insurance industry. It is likely that the level of risk will be reduced significantly, as accidents caused by human error decline. In terms of insurance policies, there is likely to be a shift away from traditional motor policies, in favour of product liability policies, as the role and responsibility of the driver gradually diminishes and the technology takes over.

Fewer accidents could lead to a reduction in losses and premiums in the traditional motor insurance market, together with a shrinking in the market itself, as product liability policies play an increasing role. If we reach the stage where road accidents are negligible, a very different insurance landscape could be unveiled. Risk would no longer be spread to the same extent amongst millions of individual drivers, but instead could be aggregated against a much smaller number of car producers and other stakeholders.

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