Goldman Sachs ‘latest report indicates that the popularization of self-driving cars will profoundly transform the $400 billion auto insurance industry in the United States. With the reduction of accidents caused by human error, insurance costs are expected to drop by more than 50% in the next 15 years, from $0.50 per mile in 2025 to $0.23 per mile in 2040. However, the issue of responsibility division remains a key challenge. At present, drivers are usually responsible for accidents, but in the era of autonomous driving, the responsibility may shift to car manufacturers or technology providers, promoting a transformation in the insurance model towards product liability and cyber security insurance.
Goldman Sachs analysts stress that the determination of liability for self-driving cars may need to be resolved through federal courts or legislation. Traditional auto insurance companies need to adjust their strategies to cover new types of risks brought about by new technologies, such as failures of autonomous driving systems or cyber attacks. Autonomous driving technology companies such as Tesla and Waymo, as well as insurer Progressive, are regarded as potential beneficiaries. Progressive is regarded as having a competitive edge due to its long-term layout in Internet of Vehicles technology and is expected to further expand its market share.
The report predicts that by 2030, the market size of self-driving cars in the United States will reach 7 billion US dollars, and the market size of virtual drivers for self-driving trucks will be approximately 5 billion US dollars. Tesla will launch its self-driving taxi service in Texas this week, and companies like Waymo have also been operating in the state. Goldman Sachs believes that although short-term premium growth is moderate, in the long term, autonomous driving technology will reshape the insurance industry landscape, and investors’ concerns about related risks may be overestimated.
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