As insurers and investors alike get excited about new growth opportunities like cyber insurance and new parametric products, it’s easy to forget about the technologies and cultural trends that will impact traditional lines of business like the old favorite: auto.

Executive Summary

Fully autonomous Level 5 vehicles won't be here tomorrow, but understanding the future of insurance in a world of autonomous vehicles is highly relevant for carrier executives today, writes Matthew Jones, a principal of Anthemis, a financial services investment and advisory firm. Here, Jones weaves descriptions of Anthemis investments in the mobility, data and on-demand insurance spaces to examine burgeoning technologies and cultural shifts in an effort to help insurers forecast where they will remain relevant in the world of autonomous vehicles. Failure to adapt could mean that risk analysis and risk management is retained entirely "in-house" within units of autonomous vehicle software companies, he writes.

According to the Insurance Information Institute, the average U.S. auto insurance expenditure grew by 17.7 percent between 2011 and 2016 compared to -0.4 percent between 2007 and 2011. Those figures point to a robust market, and it can be difficult to see how experts are predicting the demise of insurer’s auto portfolios.

Where will change come from?

Most carrier executives point to autonomous vehicles as the industry’s key prospective destabilizer.

Approximately 18,000 drivers are killed on U.S. roads annually. Over $1.6 billion was invested in autonomous vehicle-related technology in February 2019 alone. Level 5 autonomous vehicles won’t be here tomorrow, but understanding the future of insurance in a world of autonomous vehicles is clearly highly relevant for carrier executives today. Many aspects of this upcoming shift are hypothetical today, but by closely examining the nascent technologies and cultural shifts in progress, we can begin to foretell how insurance and insurers might—or might not— remain relevant in a world of autonomous vehicles.

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