Will driverless cars be the death of the insurance industry?

Driverless cars are coming and they will reduce the risk of accidents - so what does that mean for the future of the motor insurance industry?


Driverless cars could be on our roads within the decade. Some of the technology is already out there, from automatic brakes to cruise control to warnings when a car drifts out of its lane.
But if the idea of travelling at 70mph in a vehicle controlled by a computer, rather than a person, scares you, it shouldn’t. An estimated 90pc of road accidents are the result of driver error. Eliminate the driver, and you eliminate the error - or so the theory goes.

But that begs the question: if the risks of driving are removed, will there be any need for motor insurance?
The development of this new technology has certainly given the industry pause for thought. This week Britain’s largest motor insurer, Direct Line, described driverless cars as an emerging risk which could have “a major impact on the size and nature of the insurance market and the role of insurers”.