Potential impacts of autonomous vehicles on the UK insurance sector

Quarterly Bulletin 2017 Q1 article
Published on 17 March 2017

By Stefan Claus, Chris Wiltshire and Nicholas Silk

  • The development and uptake of autonomous vehicles (AVs) is likely to be gradual. Nonetheless a survey of industry experts highlights the diversity of responses and suggests rapid uptake is possible. This reflects differing views on the extent of the many technological, ethical and regulatory hurdles that remain.
  • Under the central forecast, based on the average of all responses, we would expect a contraction of the UK motor insurance market of 21% by 2040. In contrast capital requirements are only expected to fall by 12% as bodily injury claims make up an increasing proportion of an insurer’s outstanding liabilities.
  • For insurers a gradual introduction of AVs may allow time to adapt. However, questionnaire responses highlighted the need to transform aspects of the current insurance value chain, including claims management, underwriting and product development. We also expect future success to increasingly rely on partnerships with technology firms and manufacturers.

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