Self-Driving Trucks Mean Change for Insurers
QIS Quick Take: Autonomous tractor-trailer rigs will deliver a big cargo of change and uncertainty to property and casualty insurers.
For the last several years, the technology news has been full of stories about self-driving cars and what they might mean to America’s romance with the open road—not to mention mundane considerations like safety and liability. A world full of self-driving cars is going to create a whole host of issues around vehicle ownership, risk, and liability—and thus a lot of uncertainty for the p&c insurance industry.
That world may not be as imminent as we think, however, partly because of economics. The technology, at least for now, is too expensive for a mass-market product. Trucking, however, is different. Anheuser-Busch, a pioneer in testing the technology, has estimated that using self-driving trucks could save the company $40 million to $50 million per year on diesel fuel alone.
Like any major industry disruption, this brings with it good news and bad news. There are more than three million truck drivers in the United States. While not all of them would be thrown out of work—human drivers will continue to navigate the big rigs through cities, allowing the computer to take over for the long highway stretches—the number of jobs would decline sharply.
If the technology lives up to its current promise, large-scale disruption of the trucking industry seems inevitable. Morgan Stanley estimates that the overall U.S. freight industry could save as much as $168 billion per year by harnessing autonomous trucking technology, on labor ($70 billion), fuel efficiency ($35 billion), productivity ($27 billion) and avoided accidents ($36 billion).
One thing that seems certain is that the self-drive transportation business—trucking and non-trucking—will go through a lot of change and development before it reaches anything like stability. Along the way, insurance carriers will need to provide coverage appropriate to the risk levels that exist at each stage, at rates that allow them to be both competitive and profitable. At Quadrant, we’ll be focused on providing accurate, timely data to help insurers compete successfully in a rapidly shifting environment.
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