Are insurance companies ready for driverless cars?

Are insurance companies ready for driverless cars?

Nick Dumonde, managing director of Fujitsu’s insurance division, believes driverless cars could become an issue for insurance companies.

During an interview with IoB editor Doug Drinkwater at June’s Internet of Insurance summit, Dumonde says that IoT is “taking off” in personal insurance, with projects being developed in the smart home, for car telematics and for the management of health and fitness through wearable devices.

Commercial insurers, however, have been using such systems to manage logistics and manufacturing through RFID tagging and GPS for a number of years already.

An interesting example, as Dumonde explains, is that of the “connected cow”, where movement detectors are used to track a cow’s fertility levels and therefore allow farmers to maximise levels of productivity from their livestock.

An immediate consequence of these systems is that insurers can accumulate data on a massive scale and provide real-time analysis on the levels of risk in these cases.

Related: Zurich partners with IoT start-up for smart home security

Insurance companies – beware the driverless car!

Dumonde says that the biggest change for insurance companies is going to be the introduction of the driverless car. For example, when on automatic mode, human error is removed from the process and insurance companies subsequently need to cover the car, and not the driver. Volvo and Ford are already saying that they will insure the cars themselves.

Dumonde says that, according to a recent survey, over 60 percent of people would be prepared to offer personal information in order to lower the price of their premiums. This would present therefore a vast change to the existing market which may be larger than anyone expects.

Watch the video below for more analysis

By Oliver Baxandall