HBR offers three sources of alternative revenue to fill the decline in auto premiums.
- Cyber security. Insuring against cyber theft, ransomware, hacking, and the misuse of information related to automobiles can generate as much as $12 billion in annual premiums. This can be even more critical to entire fleets, for example, if Amazon deploys fleets of autonomous vehicles to deliver packages.
- Product liability. The real risk for manufacturers is the potential for failure through software bugs, memory overflow, and algorithm defects, and the resulting massive liability. Insuring against this is a $2.5 billion annual opportunity.
- Infrastructure insurance. Cloud server systems, signals, and other safeguards that will be put in place to protect riders and drivers offer an annual revenue potential of $500 million in premiums for property and casualty insurers
Our forecast shows that the drop in individual premiums – due both to decreased private ownership vehicles and to safer vehicles — will begin in 2026, as large numbers of autonomous vehicles begin to appear, and could be as much as a $25 billion loss for insurers by 2035. This is significant for a roughly $200 billion market.