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Impact of Automated Vehicles on Motor Insurance Market

Impact of Automated Vehicles on Motor Insurance Market

Key Takeaways

Insurance companies are likely to capitalize on the future risk opportunities by insuring manufacturer’s scope of product liability and excess coverage to paid by the insured.

Total Motor Insurance Market: Key Conclusions, Global, 2015–2050

The reduced risk of crashes diminishes overall revenues in the motor insurance market, thereby shrinking market capitalization. Traditional insurers will be forced to realign their motor insurance strategies with property insurance, as the vehicle becomes a living-room-on-wheels.

As product liability represents a large portion of risk currently covered by insurance, original equipment manufacturers (OEMs) may start to bundle end-user insurance into warranty packages for personal-use vehicles.

With insurance expected to be more data reliant, the traditional method of underwriting that uses historic data is likely to take a back-seat, paving the way for a new breed of underwriters who are capable of evaluating driving algorithms and assigning a relevant risk priority number.

The onus of insuring the vehicle is likely to shift from the vehicle owner to the vehicle manufacturer. All excesses currently covered by the insured shall be shared among several stakeholders, such as road-operators and local transport authorities.

Autonomous vehicles, despite being safe, are still prone to damage due to unforeseen causes such as hail storms, manually-driven peer traffic, fire, theft, and vandalism. Such risks have to be covered, apart from third-party damages, hence keeping the industry afloat.

About this report

With the technology steadily advancing from semi-autonomous vehicles to fully-autonomous vehicles, the chances of vehicles meeting with an accident and causing a fatality are reduced considerably. Over the long term, as manually-driven vehicles are replaced by autonomous vehicles, the risk of vehicles crashing is minimised substantially, which will reduce the amount of insurance premiums, thereby having an adverse impact on the current business model of the motor insurance industry. As the vehicle takes over the control of driving, there would be a shift in liability on who needs to pay the premium. This research analysis aims to highlight opportunities and avenues that could offset this deficit.


  • Executive Summary
    • Key Takeaways
    • Key Findings and Future Outlook
    • Opportunities from Changing Business Models of Motor Insurance
    • Looming Risk in Profitability of Motor Insurance Business Model
  • Research Scope, Objectives, Background, and Methodology
    • Research Scope
    • Research Aims and Objectives
    • Key Questions this Study will Answer
    • Research Background
    • Research Methodology
  • Definitions and Segmentation
    • Product Definitions
  • Autonomous Vehicles Insurance Business Model
    • Motor Insurance Business Model
    • Current Key Parameters Considered for Premium Calculations
    • Parameters Considered for Motor Insurance Premium Calculations
    • Key Parameters Affecting Premium for Manual and Automated Cars
    • Parametric Impact Analysis of Automated Driving on Motor Insurance
    • Volvo City Safety and Impact on Insurance Claims
      • Table Total Motor Insurance Market: Volvo Case Study, Global, 2014 and 2050
    • Impact of Crash Mitigating Technologies on Premiums
    • Motor Insurance Risk and Product Liability Across Automation Levels
    • European Motor Insurance Market Forecast
    • Future Roadmap of the Motor Insurance Industry
    • Business Case in the Motor Insurance Industry
    • Stakeholder Analysis and Value Proposition
    • Possible Scenarios of Motor Insurance Industry Evolution
    • Possible Future Business Models of Motor Insurance Companies
    • Summary of Impact on the Insurance Business Model
  • Conclusions and Future Outlook
    • Key Conclusions and Future Outlook
    • The Last Word-3 Big Predictions
  • Appendix
    • Market Engineering Methodology

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