auto manufacturers will get directly involved in insuring vehicles.
“That could represent a significant threat to the insurance industry,” he maintains. He was at a conference recently where a former Tesla executive speaking on stage predicted that eventually, car owners will pay one fee that combines usage, maintenance, and insurance. “Is Tesla moving to own the entire experience so it’s one interaction? Automakers will have to decide if that’s the route they want to take.”
And that’s assuming there will still be individual car ownership at scale, Super notes. Vehicle networks or usage-based leasing are likely to be more prevalent as humans transition from drivers to riders.
“As autonomous vehicles increase, they may be used as a mechanism for generating money for owners, so there will be a lot of different dynamics in play,” he says. “Will consumers use vehicles differently, or will they prioritize other things, like style and luxury? Those owners may not be interested in sharing their vehicles. It won’t be unanimous adoption—we see more of a segmented market.”
The question of liability also becomes murkier in the age of autonomy. Super says we’ve seen what happens when the industry develops new coverage models, such as rideshare insurance, in reaction to market forces.
“The industry responded after waiting and seeing—it was a reactive offering,” he says. “Many rideshare drivers use their personal vehicles, so what triggers commercial vehicle status? It usually kicks in when the drivers are en route [transporting a rider]. But with autonomous vehicles, there’s a lot of question of how human interaction will affect liability and create different types of liability. A lot of where liability falls will be determined by the courts.”
What’s important is that the insurance industry has a seat at the table as autonomous vehicles mature, Super argues. “That’s the reason we wanted to sound the alarm over the wait-and-see approach,” he says. “Nobody has a crystal ball, but it’s important that insurers are offering products and solutions to fit the market.”
According to research conducted by J.D. Power before the Uber fatality in Arizona, 48 percent of consumers were willing to use autonomous vehicles if the opportunity arose. “If you ask them the value proposition, they say it’s the ability to reduce the frequency of accidents and free up time while traveling, and the expectation of lower premiums,” Super explains. “When we see what happened in Phoenix, it undermines the value propositions, and that’s a major concern. Emotional factors are at play with consumers.”
Indeed. Cambridge, MA-based CarGurus surveyed consumers in April, a few weeks after the Uber fatality. It found that 79 percent of car owners were not excited about self-driving cars. Eighty-four percent said they definitely or probably won’t own an autonomous vehicle in the next five years; 59 percent said the same for a 10-year window. When asked which company they trusted to develop driverless cars the most, 27 percent answered “none.” That was followed by Tesla (24 percent), Toyota (9 percent), GM (6 percent), and Waymo (5 percent). Paradoxically, the survey also found that safety was the biggest cause for excitement as well as the biggest cause for concern.
“The data showed strong opinions and overall trepidation about self-driving cars,” said Madison Gross, senior manager of consumer insights at CarGurus, in a statement. “As is often the case with new technology, exposure seems to build comfort. Even though some early adopters are very excited about self-driving cars, the majority of the general public will need time to become more comfortable around them.”
