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Transportation

Insurance Companies Looking For Fallback Plans To Survive Driverless Cars (csmonitor.com) 293

An anonymous reader writes: Driverless cars could mean a huge downsizing of the auto insurance industry, as the frequency of accidents declines and liability shifts from the driver to the vehicle's software or automaker. This is compounded by the rise of ride-sharing services. Once summoning a vehicle to take you somewhere isn't limited by the number of people available to drive them (and are correspondingly cheaper), car ownership is likely to decline. Many major automakers and tech companies are throwing billions of research dollars into making this happen, and insurance companies are trying to figure out how to survive. For example, a recent patent application shows State Farm is betting on collecting massive amounts of data about you. While they'll no doubt use it to set your insurance rates, they also plan to "send you advice, alerts, coupons or discounts on insurance or other goods and services." Traveler's Insurance is thinking along somewhat similar lines. They want to create "a device that offers specific suggestions for managing errands and other travel. Customers would be able to see a map of 'risk zone' data for places they want to go, such as stores, restaurants and roads. They could then plan the day 'with an eye toward how risky such endeavors may be,' according to the patent application."
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Insurance Companies Looking For Fallback Plans To Survive Driverless Cars

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  • by halivar ( 535827 ) <bfelger&gmail,com> on Monday January 25, 2016 @10:17AM (#51365657)

    They plan on monetizing this data with or without driverless cars.

    • This almost sounds like Flo is plugging that Progressive tracking chip straight in your head...and charging you based on your risk behaviors and travels for each day.

      Fsck that.....

    • State Farm is already sending me "targeted" promotional information - so far I can't detect any value add for them coming from this Spam.

    • by vtcodger ( 957785 ) on Monday January 25, 2016 @11:25AM (#51366289)

      Seems to me like there are an awful lot of folks planning to make a living if not a fortune off advertising and data mining. It's working OK so far, but I have a feeling that there's more than one thing that can go wrong with those plans. ... and on a rather grand scale.

      • by BarbaraHudson ( 3785311 ) <barbarahudson@@@gmail...com> on Monday January 25, 2016 @11:41AM (#51366413) Journal

        You've got it. There's only so many dollars available for advertising. Insurance companies will be seeing huge drops in auto insurance, so they will not have as much money to spend advertising on TV, radio, junk mail, etc. The more businesses offering targeting data into a smaller advertiser base, the less the revenue per business. Simple supply and demand rules.

        And the auto manufacturers are big enough to self-insure ...

        Then there's the aging population ... why should someone who's retired and only drives to the store once a week bother with the hassles and expenses of owning a car - especially if their vision, coordination, or side effects of medication make it too risky?

        • For a while, at least, a lot of people are going to want personal cars still, even if they're self-driving: people in more rural areas aren't going to want to wait around for a GM/Lyft car to come pick them up, for instance. They're going to need insurance, though it's going to be less since the car will be self-driving, but they'll still need to insure the vehicle against accidents caused by human drivers, or acts of God, bad weather, etc.

          Also, it's a bit hard to believe that other companies wouldn't want

      • It gets better. Amazon has 20 years of sales history for me. 20 years of buying music, movies, clothes and misc stuff

        Not once have I ever received a targeted promotional material for something I didn't already have. Even my recommendations are wrong 95% of the time.

        The key to ad companies being routinely wrong? Enjoy variety. Don't stick to just one genre. Of anything.

  • by Anonymous Coward on Monday January 25, 2016 @10:19AM (#51365685)

    as a longitme customer of these insurance companies i have this to say...

    DONT find a way to survive you useless fucking leeches. You serve no purpose whatsoever, you are useless middlemen who profit from the suffering of others & add nothing beneficial to society.

    Rather than finding a way to survive, you should curl up in a ball and die.

    Its the best thing for everyone involved.

    • I totally agree, but perhaps in a less venomous way:

      Why can't an industry say... "I see the writing on the wall... how's about we all pivot into a new and more useful industry instead of clinging to the wrecked sinking ship of an industry we've built."

      Take the newspaper industry for example. They should have wrapped it up long ago. If they had started the digital pivot earlier, they could have forged a completely new model moving subscriptions to electronic distribution... but by waiting and milking it fo

  • by gstoddart ( 321705 ) on Monday January 25, 2016 @10:33AM (#51365805) Homepage

    While they'll no doubt use it to set your insurance rates, they also plan to "send you advice, alerts, coupons or discounts on insurance or other goods and services." Traveler's Insurance is thinking along somewhat similar lines. They want to create "a device that offers specific suggestions for managing errands and other travel. Customers would be able to see a map of 'risk zone' data for places they want to go, such as stores, restaurants and roads. They could then plan the day 'with an eye toward how risky such endeavors may be,' according to the patent application."

    So, what, they want to be our nannies, and they think people will just let themselves be tracked to prop up their failing business model?

    I'm sorry, but why the hell would anybody want this? Wow, gee, I'll just go ahead and implant this device so you can monitor everything I do and monetize it.

    How about no? I'm glad I live in a country which has real privacy laws, instead of one in which corporations assume they can just insinuate themselves into every aspect of your life for their own gain.

    So much bullshit.

    • Re:WTF??? (Score:4, Informative)

      by kilfarsnar ( 561956 ) on Monday January 25, 2016 @10:43AM (#51365903)

      So, what, they want to be our nannies, and they think people will just let themselves be tracked to prop up their failing business model?

      No, they think people will let themselves be tracked for BIG SAVINGS! and convenience. Based on what I have seen of people's behavior and ability to not think things through, I think it might work.

      So much bullshit.

      Oh yeah.

      • They already are trying it and finding less than 35% of people actually do it. This is up from 20% a few years ago, mainly due to massive advertising.

        Assuming that 50% of people would benefit and the other 50% would lose, that means a solid 15% of the population is intentionally refusing to do it. Note, that number is probably higher, as most people think they are better drivers than they actually are. Let's say that 70% of the population THINKS they would benefit from it, which means that approximatel

  • by scamper_22 ( 1073470 ) on Monday January 25, 2016 @10:33AM (#51365815)

    Are driverless cars really the big game changer for auto insurance?
    I'm in Ontario, Canada and I just don't see how this is going to change things.
    We already have 'no-fault' auto insurance, which basically means you buy car insurance to protect yourself and liability.
    You don't go around suing the other drivers or anything. When you make a claim, you just deal with your own insurance company.
    The rate you pay is still based on your risk.

    So, we have driverless cars. You still buy insurance to protect yourself and liability.
    Maybe some of the risk metrics change. Like cars with a better record of being driverless get lower rates? But that's no different than rating cars for safety today.

    I suppose some countries might need to change how their auto-insurance works. Moving more towards no-fault insurance.
    But it's not like the world doesn't have plenty of models to choose from that would better fit the driverless world.
    They don't have to reinvent the wheel as far as I can tell.

    • So, we have driverless cars. You still buy insurance to protect yourself and liability.

      That's not how I see it.

      I'm not paying for risk insurance for a driverless car. Let the maker assume that.

      A driverless car is something in which I am a passenger, can get into it after a few drinks in the pub, and for which I will take ZERO liability.

      In a truly driverless scenario, the liability doesn't extend to me, because I have no inputs. If it runs over someone, let the company who made it own that liability.

      Any

      • by clodney ( 778910 )

        I think there are 2 completely different scenarios:

        1. You call for a driverless car service, like a taxi or an Uber today - you don't have insurance, the service does. You are a passenger.
        2. You own a driverless car, and have it pick you up. You carry the liability insurance on the vehicle. You may turn around and sue the manufacturer, but there are going to be a whole host of things where you need insurance. What if the vehicle was negligently maintained? What if you engaged an emergency override of

        • Truly driverless cars will already be equipped with sensors and usage logs that will alert the owner and the manufacturer that the vehicle has to be seen within X days or Y km or it will refuse to start.
    • There is a lot of misunderstanding around no-fault insurance. If you look at insurance as a tax that adds no value, you probably hate the no-fault provisions. On the other hand, if you want to protect yourself and your family, the no-fault model works a lot better. If I have a no-fault personal-injury protection policy for $1 million, I'm guaranteed that my medical bills get covered if I'm in a wreck. OTOH if no-fault insurance isn't an option, the person who runs into me may have only the state minimum
    • "The rate you pay is still based on your risk."

      If driverless cars never have accidents and all cars are driverless cars that risk becomes zero thus the rate you pay would be...zero.

      Of course universal adoption of driverless cars is even further away than useable driverless cars themselves but eventually it may/will/could happen.

  • While those posting that insurance companies aren't useful are COMPLETELY wrong, this is really just a case of sometimes an industry isn't needed anymore. If and when we no longer need drivers, we aren't going to need insurance for those drivers. Really not a problem for anyone who isn't an insurance company, and for those who are, it's natural that they'd try to find something else to do. If they can't find anything useful for us, the consumer, then they're welcome to follow the buggy whip manufacturers

  • ...how much of this data collection is designed around coming up with "risk correlates" that allow them to increase your insurance costs beyond what they could charge based on your accident and claims history?

    It reminds me of the credit reporting agencies that want to include your driving history as a factor in your credit risk instead of determining your credit risk based solely on your use of credit.

    • It reminds me of the credit reporting agencies that want to include your driving history as a factor in your credit risk instead of determining your credit risk based solely on your use of credit.

      The insurance companies are just looking for ways to charge you more than what a typical driver would pay.

  • No. I don't want any alternative services from you fucking parasites. I have auto insurance because my state requires me to, simple as that. The second I can kick you leeches to the curb, we no longer have a "relationship".

    Don't offer me coupons, don't offer me maps, don't offer me roadside assistance, don't offer me advice - "Offer" me your absence. Just dry up and blow away like a good little obsolete industry should.
  • by QuietLagoon ( 813062 ) on Monday January 25, 2016 @10:41AM (#51365883)

    ...Customers would be able to see a map of 'risk zone' data for places they want to go...

    I wonder how much the insurance companies will charge business to assure their location does not show up in a "risk zone"?

    .
    "Pay us $1,000 insurance per month and we'll ensure your address doesn't appear in a risk zone...."

    That could be quite the revenue source.

    • Yes and no. Insurance earns money off accidents not happening, because they are huge. A 1/1000 decrease in accidents is what.... several millions to them? That still applies to 1/10000 and 1/100000 is still millions of millions of payments.

    • I love how people always fall back to the evil corporation scheme as if corporations don't have teams of lawyers that keep them in check.

      Shit ratings companies can't even run a website rating restaurants without an endless string of lawsuits about where the stars come from, you think someone will think they can make a business out of extortion in the most sue happy country in the world?

      Good luck.

      • I love how people always fall back to the evil corporation scheme as if corporations don't have teams of lawyers that keep them in check.

        I love how people always fall back to the evil corporation scheme as if corporations don't have teams of lawyers that keep them from getting in trouble for their bad deeds.

        .
        FTFY

  • Whoever came up with that idea must live in a lily white neighborhood, because this is about as close to red zoning as is possible.

    Hell, it is red zoning...

    • This is pretty much using risk analysis to raise rates where there is more risk with the data to back up that analysis. Redlining was prejudice masquerading as risk analysis. Mind you the two will overlap. But if you're using more than just that red line on a map also looking at the people as individuals etc etc. This will probably drive gentrification, which tends to be a good thing for the neighborhood overall.

      • by Nutria ( 679911 )

        This is pretty much using risk analysis to raise rates

        Not according to the article: "Customers would be able to see a map of 'risk zone' data for places they want to go, such as stores, restaurants and roads. They could then plan the day 'with an eye toward how risky such endeavors may be,' according to the patent application."

        Jesse Jackson and his ilk are going to have a field day with this...

        • Oh no people might be given information like your more likely to be mugged in this neighborhood than that one. Still seems useful a clueless traveler for example.

          Sounds like the maps that overlayed crime stats awhile back. Or the ones that show people on the sex offender list etc etc.

          It's still actual facts being used to make a rational decision that they will try to call racial bias. Facts are facts more crime happens in many predominantly minority neighborhoods. You can try and claim it's due to diffe

    • by torkus ( 1133985 )

      Yup.

      Insurance is also discriminatory, legally.

      What other industry can legally and directly charge more (i.e. discriminate) based on AGE, GENDER, marital status (which, until recently, was also linked to sexual orientation), education, neighborhood, non-felony convictions (i.e. tickets)?

      People flip their lid if a cop decides to search a black person driving an expensive car with tints and a loud stereo through a terrible neighborhood and repeatedly past a known crack house...but an insurance company blithely

  • Because of two factors:

    1. Pedestrians won't modify their behavior in any meaningfully large numbers.
    2. Cars will still miscalculate and get into accidents. At least early on, a few of this will probably end up being W...T...F... sized accidents involving bad programming and human error in human-driven vehicles.

    WRT #1, people jaywalk all the time. I frequently see people just jump out and expect a car to instantly stop for them. Well, what happens if the self-driven car either doesn't detect them or doesn't

    • by torkus ( 1133985 )

      Self driving cars can and will react faster than any person ever could.

      Yes, there's definitely some intuition...you see that car and know it's going through the light or that pedestrian is about to sprint across 6 lanes of traffic. However you can program at least some of that in:

      Evaluation - clear intersection, green light, right of way
      Tracking - other vehicles approaching driving path; current speed and direction is towards this vehicle
      Evaluation - other vehicles are required to yield due to traffic sign

    • I don't think the problem for the insurers is that insurance will be unnecessary, it's that the nature of insurance will change. Right now, you have hundreds of millions of customers. With the self-driving-car, most likely models of how SDCs will be put into people's hands reduce the number of insurance customers considerably, either to owners of fleets (the SDC as Taxi model), or even the manufacturers (the leased-to-individuals model.)

      Suddenly, the need for tens of thousands of agents, of huge database

  • Customers would be able to see a map of 'risk zone' data for places they want to go, such as stores, restaurants and roads. They could then plan the day 'with an eye toward how risky such endeavors may be,' according to the patent application."

    Want to drive a competitor out of business? Stage some "risky" things in his area.

    And who gets to decide what's risky anyway? This could blow up tiny incidents to something that causes massive droves of people to avoid a store.

    And yes, while this is already somewhat possible with today's internet, we don't have a central authority who decides what's risky, and certainly not one with money invested in inventing riskiness.

  • Anything that hurts the insurance industry is a blessing.
  • Insurance is the longest running legalized scam. And they have been getting steadily greedy. For example car insurance companies made RECORD PROFITS last year and they are raising rates because gas prices are too low.

    It's time either they get heavily controlled by the government again or go away.

  • Auto insurance will always be necessary because shit happens. No matter how smart the software becomes there is always something that can happen that the programmers didn't take into account. Example: an auto thief running a red light, pushing your car into pedestrians...who get sued?

    People buy cars because they love to drive.

    Driverless cars will appeal to people who want to play with gadgets instead of driving, or are terrible drivers, or the few who don't like to drive. Driverless cars will not tak
    • I think you greatly over estimate the amount of people that 'love to drive'. IMHO the majority of people own a card solely for transportation, not to take it out on joy rides or cruise. Its just there to get them to/from work, the store, school, etc.

      For many being able to sit and relax instead of having to pay attention on their way to work may actually make the morning more tolerable. Even for those that like to joy ride having a driverless car would still be great. I.E. trips out in the mountains I would

    • People buy cars because they love to drive.

      $DIETY, no. I hate to drive. I buy cars because they're the most time efficient way to get to the places I need to go, carrying the set of people and stuff I need to take with me.

  • What to do with all the people who are now insurance agents - Ark B? [wikia.com]

  • I believe it was mentioned in the Economist that US localities issue something like $6 billion in moving violations every year.
    With driverless cars, this drops to nearly zero.

    Granted:
    a) with a fully-implemented driverless system, logically then you probably need fewer officers because you're not policing the roads so much. Less ground to cover; and
    b) we all despise the blink-and-you-miss-it towns squatting alongside the interstate, with their 70mph-to-35mph speed limits for 2 blocks, with one lazy-ass cop

    • 70mph-to-35mph is banded by some states on interstates or the rules are set that the funds go to the state and not the local town.

      also some places need to move cops off the BS tickets roll and back to real police work. Also auto-drive cars will cut down on DUI's

  • By leveraging our broken patent system???
  • Truly driverless cars are at least a decade away, if they ever materialize at all (personally, I'm skeptical).

  • Insurance companies are cash rich. SO they invest much of it into the markets. If they start struggling for cash the impact may ripple through the entire economy.

  • Why would insurance companies need to be figuring out how to survive? True, there may be less vehicles in the future, but they will still be insured. Yes, the vehicles may be safer and have fewer accidents, but they will still be insured. Insurance companies profit from managing the risk. Yes, they will have lower gross revenue, but they will also have lower expenses. The net effect should be unchanged.

    That is, of course, assuming that insurance companies aren't charging inflated rates in the current c

  • Already the roadways are getting safer. We have adaptive cruise control, lane departure systems and, most importantly, things like airbags that minimize human damage in the case of an accident. Sheet metal is cheap compared to organs. In the US (and I think most of the world), cars only have to meet the safety requirements in place at time of manufacture. There are still cars from the 1980s and 1990s on the road (mostly Corollas and Camrys that were great cars at the time) with no air bags or only two f
  • by LQ ( 188043 )
    Does anyone but the most optimistic of geeks really believe that autonomous road vehicles will make much of an impact on private transport in the next 50 years? Come back when it can fly and dodge the kids on hoverboards.

The only difference between a car salesman and a computer salesman is that the car salesman knows he's lying.

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