Visions of robotic self-driving cars may appear like something from a George Lucas film but in June 2011, this vision took a giant leap toward becoming reality when Nevada became the first state to enact legislation that allows driverless cars. This move allowed Google to begin testing its experimental driverless technology.

Executive Summary

When driverless cars are mainstream, claims handling will become the domain of data analysts, insurance will be priced and sold by computers, and forward-thinking carriers will have built policies recognizing that the car will be the risk to insure, not the driver, CFC Underwriting's Graeme Newman believes.

The prospect of highways full of self-driving cars is now a few decades away and will undoubtedly change our social lives in many ways. The impact of this new technology on the $200 billion automobile insurance industry will be equally profound.

Led by the Google engineer who co-invented Google Street View and whose team won an award for the development of a robotic vehicle in 2005, the driverless car system combines Google’s advanced mapping technology with inputs from in-car video cameras and various sensors and lasers outside. Advanced software then computes these inputs to control every aspect of the car, from steering and navigation through to accelerating and braking.

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