Driverless car, for the first time alone, in a traffic jam

It’s already history: Google, or rather its spin-off Waymo, beat everyone by bringing on the highway the driverless car without any human presence. The race towards the mobility revolution is at its final sprint, here are the impacts on insurance

10 Nov 2017

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A Fiat Chrysler will go down in history to be the first car to have faced the city traffic completely alone: the era of driverless car is approaching, but until today the tests on the highway had always involved a human being as a driver.

This step forward is Waymo, a company belonging to the Alphabet group and a former Google driverless car project. The company’s CEO, John Krafcik, said Tuesday that Waymo began testing on the streets of Phoenix, in the US state of Arizona. A video on board the vehicle shows how did it go.

As reported by EconomyUp, it is only an autonomous driving test in real situations, but in the coming months, the boss of Waymo pointed out, Fiat Chrysler Pacifica minivans adapted with the company’s self-driving system will also start tests with passengers on board in some areas of Phoenix, Arizona, where there are no restrictions on autonomous driving but above all the weather is dry and very predictable: the developers of the software controlling the self-driving, in fact, would still have some problem with situations in which there will be snowfall or heavy rains.

If at first the passengers, who will be the first human beings to use, even if only as a test, a fully driverless taxi service, will be accompanied by a technician from Waymo (who will sit in the back seat for any eventuality), then the service , which will initially be provided free of charge, will be extended to the general public, but it is not clear yet what the timing or which, once the running-in period is over, the cost for a run on the robotics of Waymo will be.

What will change for insurance with the driverless car

According to the Bank of England the driverless car could even wipe out insurance for cars as we know it today, based on human error and accidents, elements of risk that should be reduced to zero with the new “smart car”.

Computers do not fall asleep, do not drink, do not get distracted, can process images and data much faster than human beings, in short computers can undoubtedly drive better than a human being.

In fact, McKinsey forecasts a 90% reduction in vehicle accidents, and it is clear that the main reason for which the vehicle is insured will weaken and cause, as a minimum, the drastic reduction in insurance premiums.

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The commentators of Forbes, Wall Street Journal, The Telegraph and MarketWatch also gave the alert.

Big changes deriving from the arrival of the driverless cars represent, at the same time, a great opportunity for innovation in insurance services, for the companies that will be able to take advantage of it. For example, it will be necessary to rethink the car insurance by shifting the responsibility from the “human” driver to the car manufacturer, then rethinking the relationships in b2b perspective.

The insurance industry has its huge database of users and brands already recognized, which constitute not only a great value of exchange in b2b, but an asset in terms of information and potential users for the provision of new services completely outside the core business but rather still profitable.

As stated in the Bank of England article “traveling on a driverless car, passengers have more time to stay at the computer, use their own iPad, to watch TV or listen to music, lots of new possibilities to deliver new services by insurance companies”.

On a final note, if on the one hand the driverless car eliminates certain security problems, on the other hand it sets new ones: for example, in terms of security of the software that drives the car. New insurance products may be linked to protection from cyber-attacks or software system malfunctions, which can never be completely excluded.

The need for insurance coverage will not fail with the driverless car, but the sample of current insurance products needs to be rethought and the opportunity for innovation that comes with an open 360-degree perspective is taken into consideration.

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