Two visionary billionaires, Warren Buffet and Bill Gates, recently said that the rise of self-driven cars would spell the end of the car insurance industry. The two giants appeared recently on Squawk Box on CNBC, wherein they said that they believed that autonomous vehicles would upend car insurers.
The foreseeable change is already in its early stages, with the Insurance Institute for Highway Safety (IIHS) reaching an agreement with a large number of manufacturers in the United States to make automatic emergency braking, a standard feature in all cars by 2022. Studies on this feature have shown that rear-end accidents have been slashed by 40 per cent, and the severity of the unavoidable collisions have been significantly reduced.
Although, there is a niggling question yet to be answered: who is responsible for a crash? The driver or the manufacturer? Till date, Mercedes-Benz and Volvo have accepted liability for software-related crashes; the rest hasn't spoken up about the matter.
On the other hand, Bill Gates believes that it will take a good part of 15 years for autonomous-based features to impact the insurance industry.
"There's no question," explained Warren Buffet. "Anything that makes cars safer is very pro-social, and it's bad for the auto insurance industry. But nevertheless, the auto industry has always worked on making cars safer. They've led the way on seat belts and all that. But if there are no accidents, there's no need for insurance."