Autonomous vehicles: is the traditional automobile insurance old-fashioned?

Autonomous vehicles: is the traditional automobile insurance old-fashioned?

Today, insurance campanies are facing new challenges further to the emergence of new technologies and the digital disruption within the insurance business : the arrival of the autonomous vehicles. In recent years, insurance companies have based their business model on three competitive advantages: Risk assessment, the knowledge of historical causal event data for loss probability through carrier portfolios. Risk pooling, the unwillingness or inability of single entities to cover their total individual risk. Risk timing, the ability to even out risks over time through risk assessment and risk pooling with time-delayed data analysis and according premium adjustments. In fact, insurance companies are now doing extensive research on individual drivers in order to price policies, as there is no comparable information exists for  autonomous vehicles. The insurance industry must redesign its current pricing structure to cover the decisions made by a machine instead of a human. The safety track record of a fleet will likely play a major role in the calculation.

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Blockchain and Insurance: the next revolution

Blockchain and Insurance: the next revolution

Blockchain is a distributed ledger that is broadly discussed as a technology with huge innovation potential in all areas of financial services. To date, the majority of usage cases of this technology are in the banking arena. We can refer to several publications available on Initio’s blog regarding the impact of blockchain technology and the usage of crypto currencies in financial services.

However, the blockchain technology also offers potential use cases for insurers that include innovating insurance products and services for growth, increasing effectiveness in fraud detection, pricing and reducing administrative cost. In these application areas insurers could address some of the main challenges they are facing today – such as limited growth in mature markets and cost reduction pressures.

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