Autonomy is already entering the mid-market car segment

Thomas Hallauer, research & marketing director,
PTOLEMUS Consulting Group

As part of the 2016 edition of the Usage Based Insurance study, we analysed the impact of autonomy on the insurance market. We forecast that 380 million semi, highly or fully autonomous vehicles will be on the road by 2030.

This might sound like a lot, says Thomas Hallauer of Ptolemus, but then last week in Las Vegas, we heard that new manufacturers are entering the race. Typically, we expect the luxury brands to foster the development of autonomous vehicles (AVs), with Mercedes, BMW and Tesla all topping the list of development activity. This time however, it is the mid-market brands such as Nissan, Ford and GM that are making the announcements.

All three arrived at the show with news and partnerships up their sleeves as the competition grows ever more intense.

  • Nissan, in partnership with Renault, announced 10 vehicle models with autonomous capabilities on the road by 2020. First with single-lane control from this year and rolling out multi-lane control intersections assistance from 2018 onwards.
  • GM announced a $500 million investment in Uber rival Lyft, which it says, could lead to the development of a fleet of driverless cars, some of which available for hire, as well as a network of car rental stations. This follows previous news regarding the development of GM’s self-driving version of the hybrid Chevrolet Volt.
  • Ford revealed an agreement with Amazon, aimed at linking cars with connected homes and the Internet of thing.
    Ford was also expected to announce a tie-up with Google, but that did not happen. Possibly following recent regulations proposals limiting driverless vehicle testing in California. Instead, the carmaker stated that it would triple the size of its Fusion Hybrid autonomous research fleet this year to 30. They will also integrate new solid-state lidar sensors that create real-time 3D models of their surrounding environment.

Although many autonomous functions, such as cruise and parking, are aimed at improving comfort, most of the development today is focused on safety and crash avoidance.

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These functionalities will have a direct impact on the insurance industry a lot sooner than the driverless car. We analysed and quantified that impact in the study to precisely estimate the share of accidents that could be avoided with the introduction of ADAS functions.

For example, we concluded that frontal collision avoidance and cruise systems could reduce losses by up to 50% (depending on the level of sophistication).

ADAS functions could therefore lead to a reduction in accidents of between 30 – 40%, with AVs beginning to have a significant impact in mature markets from 2023 onwards. In the most advanced countries, such as Germany, premiums will decrease by up to 40% between 2020 and 2030.

With the end of the statistical actuarial model also approaching, insurers will need to be acutely aware of the car technology evolution speed. The car without accident will be on the road long before the car without driver.

The 2016 edition of the UBI Global Study was launched last month; It covers the impact of ADAS on insurance premiums in details and with a market forecast up to 20130. You can download the free abstract here.

The author of this blog is Thomas Hallauer, research & marketing director, PTOLEMUS Consulting Group.

About the author:

Thomas Hallauer has gained 15 years of operational marketing experience in the domain of telematics and location-based services. He is an expert in new products and services notably in the automotive, motor insurance, navigation and positioning industries.

Having organised more than 25 international conferences and being a frequent blogger of telematics news, he has built a large network of relationships in the global telematics landscape.

Thomas is the lead author of the ETC Global Study, the most thorough review of the Electronic Toll Collection and Road Charging market published in May 2015.

Thomas researched and co-wrote the UBI Global Study, the reference document for the telematics insurance market published in October 2013 and December 2016.

Thomas is also the co-author of the European Location Study, the most comprehensive report on the location business and technologies published in May 2010.

Previously, Thomas was working for Mobile Devices, one of the global providers of telematics technology platforms. He built a marketing strategy to promote the rebranding of their offering, launched new products and services and drove inbound marketing and sales.

Previous to that, Thomas was the head of Telematics Update. He researched, wrote, published, marketed, set up and then chaired 25 successful conference and exhibition globally.

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