An Australian insurance expert has warned insurers that driverless cars and their insurance potential have the potential to derail profits and revenue streams.
The Age reports that Ross Curran, an insurance analyst at Commonwealth Bank, has warned clients that the rise of driverless cars could eat into revenues in the not-so-distant future.
"Unless mono-lines motor insurers could quickly adapt to currently non-core lines of insurance, their revenue streams could be severely impacted," Curran reportedly said in a note to clients.
Curran noted that the possibility of driverless cars opens up a multitude of doors for savvy insurers, brokers and underwriters and that the opportunity to cash in on the latest technology should not be missed.
"There is also an opportunity for product innovation by insurers in order to gain market share in a new product.”
Head of insurance at technology firm CSC Australia, Stephen Browne, also told the newspaper that driverless cars are not going away and insurers should be prepared for the latest market.
"It's definitely coming, and companies need to look at all these disruptive plays. The challenger brands will look at these technologies readily and move quickly," Browne said.
"Change can lead to opportunity – in the long term mono-line motor insurers are likely to face a tougher outlook than diversified insurers."
The news comes weeks after the president of business trategy firm Martello Associates Consulting, George Cooke, told The Wall Street Journal that driverless technology will be a big player on the market in the coming decade.
“Look at the driverless car, it is terribly real,” Cooke said.
“It won’t be immediate, but there will be a transition in the next 10 years, and there will be some interesting challenges to the insurance industry.”
