- Where Insurance & Technology Meet

Insurance 2023: Changes to the Auto Means Changes in the Auto Insurance

Despite improvements in product efficiency, performance and design, the automobile industry has remained relatively stable over the last few decades.  But all that is about to change … dramatically.   How will this impact the Canadian insurance system?  You will have an opportunity to find out on October 3, 2013.

Progress has a price …

The arrival of the automobile transformed the world around us. It changed the lives of individuals and created opportunities for businesses. It improved productivity and increased freedom of movement.  It gave rise to an industry that today employs tens of millions of people (direct and indirect employment) around the world.  But, these benefits came at a cost.  More than 1.2 million people around the world are killed in auto-related collisions every year.  Millions more are injured due to such collisions.  The number of lives lost annually to vehicular “accidents” equates to 115 737s crashing every week, with no survivors.  The world would be outraged if that were to happen. And yet, local news stories about auto-related deaths seem to attract little attention.

Road transportation has also contributed significantly to air pollution and GHG emissions.  Given the proliferation of vehicle ownership, particularly in the “western world” and increasingly in developing economies, our ever-expanding highway and road networks are congested, leading to inefficiencies in travel, frustration and increased costs.

What is ‘Peak Car’?

In recent years, a phenomenon known as “peak car”  has been identified in Europe and the US.  Millennials, highly urbanized and relatively more environmentally aware than their predecessors, are turning to alternative forms of mobility.  On the other end of the demographic spectrum, our aging will increasingly need to be driven given their physical and mental limitations.  Given limited availability of government funds for such programs, other solutions are being sought.

Enter the solution: autonomous drive or driverless vehicles.

For approximately four decades, OEMs and academic institutions have been working on the development of autonomous drive. And after decades of efforts, software and technology giants as well as automotive OEMs are converging on a technology that is expected to be commercially available around 2020.

Driverless technology will enable significant changes in mobility.  These changes promise to impact individual Canadians, businesses, …society as a whole.

Auto insurance, representing approximately $19 Billion in premiums annually, will necessarily adapt to the new mobility realities. In addition to auto insurance, this “revolution” will bring about changes to Commercial Lines accounts as few businesses will be untouched. Welcome to the driverless revolution.

Get in Gear at Insurance 2023

All of these changes as well as implications for the Canadian insurance industry will be presented and discussed at the Insurance 2023 session on October 3rd 2013.  Details and registration information can be found In the Insurance 2023 Site.

Editor’s Note: Catherine Kargas is Vice President at MARCON, and Vice Chair Electric Mobility Canada.  Catherine will be elaborating on the impact of automotive technology at Insurance 2023 on October 3, 2014, where you can ask her about a very interesting trip she had to the SF Bay area recently.