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Car Insurance Industry To Vanish? Or Change?

Will the car insurance industry be gone by 2030, as Tamsyn Parker at the NZ Herald suggests in this article. Well, maybe.

But first, imagine everything we have to do with roads, cars, and transport, remains the same, except the cars are all driver-less. Then imagine there are very few accidents. I still don't see a future in which there is no car insurance industry, but rather one which is radically changed: many fewer loss adjusters and panel beaters for a start. But rare events - like an accident in an environment where 99% of accidents have been eliminated - are likely to have greater financial consequences and you will still want some cover. Life insurance is like that. Compared to 150 years ago early death has been almost eliminated. But far more people today have insurance than back then. 

But the problem with that kind of futurism is that rarely does only one thing change, we think it is important not to think of one change on its own. Uber, Lyft, and other ride-sharing companies have a different goal: they want to change the nature of transportation from privately owned vehicles which currently dominate, to a more efficient model of shared or corporate ownership where you only pay for the service when you use it. In such a circumstance the nature of insurance has changed again: such companies will require big liability insurance and the requirement for individual cover has vanished. The market has radically changed. 

Other possible futures could be constructed, and in different parts of the world key variables like population size, density, and regulation will drive different outcomes. 



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