Insurance companies that specialise in selling vehicle cover could see their revenue streams vanish in a few years if driverless motor vehicles and new motor technology take off, according to new research. But driverless vehicles can also represent new opportunities.
"Unless mono-lines motor insurers could quickly adapt to currently non-core lines of insurance, their revenue streams could be severely impacted," the Sydney Morning Herald reported citing a research note regarding driverless vehicles by Commonwealth Bank of Australia insurance analyst Ross Curran.
But he also said: "Change can lead to opportunity.”
His research note says that insurers could switch from selling personal liability policies to product-specific covers for manufacturers.
Currently, with the vast majority of vehicle crashes, the liability lies with the driver. But as cars increasingly connect with each other and the driver is not connected to monitor the vehicle, the blame could shift from individuals to car manufacturers or even software developers.
Those who fail to keep pace with innovation could face revenue losses as the technology improves and more drivers shift to DMVs.
Late last year, research from Curtin University claimed that DMVs could be within the price range of the average person within 10 years.
"In the long term, mono-line motor insurers are likely to face a tougher outlook than diversified insurers," Mr Curran said.