Driverless Cars and declining insurance premiums - what happens to the float?

A recent KPMG report on driverless cars suggested that by 2040 the rate of auto accidents will have fallen by more than 80%. This will obviously have corollary of this is that the amount of auto insurance sold will also decline by a similar amount if not more. What potential impact will this have on a company like Geico that relies on it's 'float''s to maintain profitability?


  • Are they kidding? Hardly anyone nowadays can even drive on cruise control! Who then is going to be content putt-putting along at the speed limit? Names, please. Lead-footers will blow these driverless cars off the road, won't they? These driverless cars will be backed up so far...they'll never get there. I'm just somebody who concluded 39 years of occupational driving, so what do I know? I do know when I drive 50 miles on the freeway to my place out of town at 60 mph in the slow lane I get passed up all along the way. I do find it entertaining however to watch the ad hoc formations flow by. They come in swarms, grouped up behind the leaders, dipping and diving and tail getting each in a haphazard way to get sorted out. Then off they go in a cloud of dust leaving me to enjoy the freeway to myself....for a little while. This is called surfing the freeway. But to go on, our glorious liberal social engineers apparently think they can even change human nature. I might add too that there's still going to be accidents. And pardon me for the inquiry, but I'm curious to know how long these accident investigations are going to take when a driverless car is involved? On the plus side, this development may extend my life. I actually want to live to see this!
  • An interesting point, perhaps we will see which one of our human urges rises to the top, the compulsion to drive faster or the ability to get things done while commuting (or being lazy and doing nothing at all). Having lived in Europe for a long time where trains are the primary mode of transportation I've found I am now used to having that extra commute time to get reading done, or talk to friends or whatever and although I did miss driving in the beginning, I think I'd miss that time more. In terms of machine learning in the area of human behavior and traffic, I think engineers have actually made some very useful and interesting advancements in some of the most unlikely areas, in London, New York and Berlin HP were able to study traffic flows and actually close short cut roads which, because of human nature, led to a sort of 'tragedy of the commons' scenario of overuse and thus causing congestion. Like you, I look forward to seeing how it plays out, especially from the context of investing in technology.
  • You could drive across Europe in one day if they had the freeway, I think. You can spend two days just driving across Texas. People travel here just to get the feeling of having some elbow room and experiencing the wide open spaces. Americans love cars. 25% of our jobs are selling, moving, storing, fixing, parking, insuring, financing, painting, restoring, detailing, marketing, moteling, washing, towing, repossessing, and leasing them etc. It's our culture.... the elites are trying to change. Do we think they art going to give up their fun of driving? They haven't given up their private jets, yet. When is that going to happen, I wonder
  • I will be getting one.
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