Driverless Cars May Shift Risk from Insurance Industry to Carmakers

A trio of insurance experts at the Bank of England says the arrival of self-driving cars could transform the insurance industry by shifting liability for crashes to the manufacturer.

Such a shift would present a challenge to government agencies that currently regulate insurance providers. For example, robotic cars eliminate traditional risk analyses that set insurance rates according to a driver's age and experience.

Insurers in England could see a 50% drop in premiums collected by 2025 and an 80% drop by 2040 as the proportion of autonomous vehicles increases, according to the U.K. insurance data provider Thatcham Research.

The BoE experts opine that insurers might explore new products, such as cyber insurance to protect personal data stored onboard self-driving vehicles. The bankers also theorize insurers and vehicle manufacturers may end up partnering as emphasis shifts from the insurer and driver to a new form of intercompany insurance contracts.