DETROIT — As vehicles enter into full autonomy, there will be a “tipping point” in the insurance industry, Mariel Devesa, head of product innovation at Farmers Insurance, said yesterday at TU-Automotive Detroit.
The “tipping” point will be marked with a “shift” between personal policies and commercial policies, she said. In the short-term, the cost of insurance will continue to rise, and the frequency and severity of insurance claims will increase, she told attendees. In the long-term, as autonomous vehicles are factored in, “it’s no longer going to be a personal policy — which is human error,” Devesa said. “It shifts over to a commercial policy as you add technical failures [of the vehicle].”
Claims frequency and severity will climb too, as vehicles get packed with more tech — and thus, more opportunities for technical failures, added Chad Ammons, vice president of global strategy and development at specialty insurance provider Assurant.
“From what we’ve seen so far, we expect to see electronic components increase in frequency of failure and certainly impact the severity of the claim,” he said. “It hasn’t hit us [the industry] yet, but we don’t know how long the reliability of these new components are. We anticipate they will wear out even faster.”
The period between now and full autonomy is complicated for insurers, because of all the technological unknown, the panelists agreed.
The more systems that are integrated into the vehicle, the more the risk factor rises, Ammons said. “We just have to pivot and look at the world through a fleet set of eyes, rather than through an individual set of eyes.”1 - Reader Likes This Post