Autonomous car adoption worldwide is going to have a major knock-on effect on most industries that rely on humans driving cars.
One industry that may see a severe downturn in revenue is the auto insurance industry, according to Berkshire Hathaway CEO Warren Buffett. The billionaire investor said to CNBC “anything that makes cars safer is very pro-social, and bad for the auto insurance industry.”
Cars have been made way, way safer, but now when you start making the driver safer, that would be a big jump, and that will happen someday, and when it happens there will be a lot less auto insurance written.”
Buffett’s holdings company manages Geico, one of the largest auto insurance companies in the United States. For the past 15 years, Geico has increased its revenue, but the onset of autonomous vehicles might see a downturn in the company’s success.
Autonomous vehicle manufacturers might also take it upon themselves to self-insure, rather than have the customer spend thousands in insurance costs for a car controlled by the manufacturer’s software.
Could insurance be split between car owners and car designers?
We might even see a half-and-half solution, where automakers are willing to insure for accidents that happen due to a flaw in the software, but not if the customer takes control of the vehicle and has an accident.
Either way, the likelihood of an accident on the road is bound to fall, which will make auto insurance less expensive; one would hope.
Autonomous cars are also going to change how many miles cars rack up in a year, according to research from the University of Michigan. In the study, the team found that autonomous cars may allow families to downsize to one car and use the car for other purposes while they’re at work, like picking up the kids, shopping, or renting the car to a taxi service like Uber or Lyft for pick-ups.
That might benefit auto repairs, since the car will spend more time on the road, causing issues with tires and the engine to arise quicker. Google has already made note of the potential uptake in repair shops, to reassure the industry that there’s still some future for them in the autonomous world.