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China’s motor insurers will face massive disruption in the industry once self-driving cars become commonplace on the roads, according to a study.
A joint study by the Insurance Society of China and Fudan University revealed that three in four insurers expect insurance premiums to become bundled with the vehicle’s price tags, while six in 10 expect premiums to decrease once self-driving vehicles become the norm on China’s streets, reported South China Morning Post.
Artificial intelligence (AI) has made striking inroads in many areas of the motor insurance business, experts said. These range from damage assessment to the actual insurance purchase process.
“AI is casting a growing influence on insurance practitioners,” said Yao Qinghai, chairman of the Insurance Society, was quotes as saying during a speech in Shanghai. “We urge the industry to get better prepared for a changing landscape, as many jobs could be replaced.”
The report gathered views from 47 experts, representing insurers, the fintech sector, and government regulatory bodies. It also surveyed 242 managers from motor insurers during the first quarter of 2018, and 1,152 middle-class car owners in August last year.
Around 76% of car owners said that the makers of self-driving cars are likely to take responsibility for accidents, which represents a massive shift in the insurance business model.
On a positive note, over 60% of car owners expect that autonomous vehicles are positive for road safety, leading to fewer accidents and less severe damage in case accidents do happen.
China Pacific Insurance earlier announced that it had received RMB55.3 million (US$8.7 million) from the government to conduct research and development activities related to self-driving vehicles. The insurer is also part of a government-backed alliance for the technology in Shanghai. The city is the first in China to conduct road tests of autonomous vehicles.
