Autonomous car to shrink the insurance section by over 70% ($137 billion) by 2050 according to KPMG
Insurers will have to rethink their role in the automotive market and the relationship to its participants. The auto insurance sector will undergo rapid changes. It will shrink by over 70% ($137 billion) by 2050, according to 2017 KPMG report.
The autonomous technology is improving cars’ safety and so the accident frequency might be reduced to 90%. Auto manufacturers will assume more of the driving risk and liability, and will start providing insurance to car buyers. The mobility-on-demand market will grow at a CAGR of 19.81% by 2025 to reach USD276 billion. Its rapid increase means less personal auto coverage and commercial insurance for the fleets.
A 2016 report by Deloitte reaches similar conclusions. By 2040, the autonomous vehicles could decrease the total annual auto insurance premiums by up to 30% due to their safety. The personal auto premiums would drop even more while the commercial auto and product liability premiums will grow.