Japan: Insurers face uncertain ride in future of self-driving cars
Source: Asia Insurance Review | Mar 2017
Non-life insurers in Japan are trying to determine how self-driving cars will affect their automobile insurance premiums which currently account on average for around half of their revenue.
While self-driving vehicles are expected to make driving safer, and hence lead to declining motor premiums, the new technology will also mean new risks for insurers to cover.
Mr Yasuzo Kanasugi, President of Aioi Nissay Dowa Insurance, predicted that the auto insurance market will shrink, The Nikkei reported. Even if fully autonomous driving is something for the distant future, “the number of car accidents and the damage they cause will steadily decline in the coming years, due to progress in car safety technology,” he said.
But Mr Yasuyoshi Karasawa, president and CEO of MS&AD Insurance Group Holdings, argued that there will be new risks, notably from hackers trying to break into networks of connected cars.
“When self-driving cars become popular, there will be greater risks of massive accidents,” he warned. He believes the era of autonomous driving will require new types of auto insurance.
Mr Kengo Sakurada, President of Sompo Holdings, said the government and the private sector need to work together to create a legal framework for autonomous cars.
“Insurers need to share data so that the public and private sectors can work together to set proper levels for premiums on auto insurance,” he added.