Autonomus vehicles


Autonomous vehicles and the insurance industry

Insurers confront the "when" and "how" of self-driving cars

As consumers increasingly embrace the future of mobility, auto insurers should position themselves to take the driver's seat—or they could lose the race.

Ladies and gentlemen, start your engines

With sensor-loaded cars poised to reduce accidents by 90 percent,1 and ride-sharing/ride-hailing trends pointing toward decreased vehicle ownership,2 the auto insurance industry could be challenged to compensate for the apparent inevitability of falling premium rates and perhaps a substantial volume of business.

Our new report explores how insurers can develop transformational strategies to remain relevant and create value for consumers, yet still be profitable in this emerging environment.

Deloitte's recent Global automotive consumer insight platform study, highlighted in The race to autonomous driving: Winning American consumer trust, surveyed 22,000 consumers in 17 countries, including the United States, to better understand consumer preferences related to the evolving driving economy. These insights could potentially help insurers get ahead of the curve.

Action without insight could be doomed

Global consumers seem divided among regions and age groups regarding the level of desirability for autonomous vehicles (AVs) technology and ride sharing/ride hailing.3

Autonomous vehicles: While many motorists, particularly in more developed countries, remain uncomfortable sharing the road with self-driving cars and most still say they don't want to own them, they did indicate they would be willing to try them once there was an established safety record.4 Consumers surveyed in more emerging economies, such as India and China, as well as younger demographics in the United States, Germany, Japan, and India appear more enthusiastic about near-term increased autonomy of vehicles.5

Looking at the bigger picture, regardless of geography, technologies that most consumers really want embedded in their vehicles seem to be focused on safety, as opposed to "service enablers" that they would prefer to get on their smartphones.

Ride sharing/ride hailing: The rise of pay-per-use ride-sharing services is expected to lead to a decrease in individual car ownership down the road, at least in urban areas.

As the driving economy evolves, insurers worldwide would need to fully understand consumer acceptance of the future states of mobility and the tech that drives them, in various regions and among different age groups, to adapt their responses accordingly.

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Insurers should jump on the bandwagon

The transitional timeframes wherein AVs could share the road with human-driven vehicles, and the longer term, when self-driving cars may dominate, will likely force a fundamental shift in insurers' product mix, as they would for underwriting, pricing, and business models.

These changes could prompt the following actions:

  • Recognize that rate of change by geography and age may vary
  • Develop more technical underwriting capabilities
  • Prepare for incremental changes to cost structures
  • Navigate with insufficient or incomplete data, and exploit emerging sources
  • Establish advanced analytics capabilities
  • Plan for product and business-line shifts—including offering driverless car insurance
  • Retrain claims adjusters to interpret intricacies of shared driving
  • Recognize the threat of non-traditional competitors

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autonomous vehicle illustration

Getting onboard: When one door closes, another one opens

Insurers will likely need to quickly find their footing through the transitioning mobility ecosystem.

They cannot afford to be laggards when it comes to modernization, given the fundamental shift taking place in their insurable exposures. Disruptive forces confronting the auto insurance industry seem to demand quick and nimble responses to maintain relevance amid a changing risk landscape and the potential for heightened competition from both traditional and non-traditional sources.

It is likely that only those insurers with a flexible business model and diverse product mix may thrive going forward, as technological and societal trends take hold at an uneven pace in the autonomous vehicles and insurance industries.

See below for a recap of what insurers might do to fortify their positions.

Additional resources

The entire way we travel from point A to point B is changing. This transformation is creating a new ecosystem of personal mobility, with implications affecting more than just the automotive industry. Our team serves the entire ecosystem of companies working in and around mobility. Explore the Future of Mobility™.

1Seth Birnbaum, “The Insurance Impact of Self-driving Cars and Shared Mobility,” Crunch Network,, November 8, 2016.
2Alissa Walker, “Car Ownership May Decrease in the US—Here's Why,”, February 6, 2017.
3Craig Giffi, Joe Vitale, Ryan Robinson, Gina Pingitore, “The Race to Autonomous Driving: Winning American Consumers’ Trust,” Deloitte Insights, January 23, 2017.

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