Self-driving cars, already underway to revolutionizing the auto industry, could be on the road as soon as 2020, leaving experts to wonder how the inevitable overhaul could affect the insurance business.
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Warren Buffett, the chairman and CEO of Geico’s parent company Berkshire Hathaway (NYSE:BRK.A), has already warned that the surge of autonomous vehicles will likely decimate the insurance business.
But, Allstate (NYSE:ALL) CEO Tom Wilson told FOX Business’ Liz Claman at the Consumer Electronics Show in Las Vegas that he sees an opportunity for growth. The company currently insures 240 million cars, and that transition to self-driving is going to take “a long time,” he said. In the meantime, the company is trying to re-center its focus by expanding insurance options to digital safety, like cell phone damage or online cyberattacks.
“Obviously, fewer accidents and fewer people dying is a good thing,” he said. “And so we’re kind of leaning into it. But it’s going to take a long time before we get there.”
And, good news for consumers: Wilson predicted that insurance will be cheaper since companies will know more about how the car drives, and fewer accidents and fewer deaths means there’s less to fix.
However, if there is an accident involving an autonomous vehicle, the question of who’s at fault remains in legal limbo: Is it the car manufacturer, the software producer, or the person who owns the car? Most likely, Wilson said, a lawyer would investigate the claim to find who was at fault -- which would probably be either the manufacturer or the software producer.
“Seems unlikely to me that the owner of the vehicle, unless they did something to the car to make it not safe, would get sued,” he said. “It’s really going to be the large companies that make this.”