As usage based programs become more common, it is changing the future of this part of the industry.
As both vehicle and telematics technology continue to evolve and usage based programs come closer to the mainstream, the auto insurance industry is placing a much greater focus on the actual behaviors of the consumer, while behind the wheel.
Some industry experts feel that coverage is now becoming a tool to encourage motorists to become better drivers.
At the same time, it also means that increasing automation in vehicles, to the degree that self driving cars could make their way onto the roads, are facing barriers that have more of a political than a technological nature. This, according to Celent CEO, Craig Weber. Weber was among a number of panelists who spoke on issues regarding the future direction of auto insurance at the National Insurance Conference of Canada (NICC).
A number of technological features are becoming more mainstream and these affect auto insurance risks and rates.
Weber pointed out that various types of technologies have already been working their way into the mainstream, such as lane changing warnings and support, collision avoidance features, and external cameras for better sight from the driver. Moreover, these and other technologies such as automated enforcement (for example, red light cameras) and telematics devices used by usage based auto insurance programs all have their own implications for the way that automobile coverage’s role and the strategies that insurers should be adopting in the future, said Weber.
He stated that “The need for auto insurance will be reduced,” but pointed out that it is not yet known to what extend that reduction will occur, nor within what timeline. A great deal of those answers will be affected by the types of technologies that are legislated or mandated by the government. Some collision avoidance systems have already been mandated for use within certain geographies.
At the same time, the president and CEO of the Traffic Injury Research Foundation, Robyn Robertson, pointed out that at the moment, many drivers may not yet fully understand how the current safety features within their own vehicles work and how to best take advantage of what they have to offer. This could mean that the impact on the future of auto insurance may not be a rapid one, as it will depend on user behavior.