Driverless cars will cut insurance prices by over 60%, June 30, 2016. by Mina Martin

With the rise of driverless cars, an independent research company says the cost of car insurance will plummet by two-thirds, reported Auto Express.

A new report by Autonomous Research suggests that driverless cars will cut UK insurance premiums by 63 per cent by 2060, causing the motor insurance industry to shrink by over 80 per cent.

Said Auto Express, 42 per cent of the current global motor market is made up of motor insurance policies, with one-third of all claims generated from rear-end shunts − two- thirds of which occurred at speeds below 30 mph – and about a quarter from parking and reversing scrapes. The average motor insurance policy costs £357 in the UK last year.

According to the Autonomous Research report, the percentage of insurance claims will plunge from 9 per cent to 2.4 per cent by 2060 once fully autonomous cars are on the road. Already, semi-autonomous cars − with features like adaptive cruise control and autonomous emergency braking (AEB) – are reducing the number of road accidents.

Autonomous Research has estimated a 14 per cent drop in accident rates with the basic advanced driver assist functions such as the AEB; and a potential 36 per cent drop with more advanced systems.

Said the report: “While Google & Tesla focus on fully autonomous solutions, established car markets have opted for a gradualist approach, progressively introducing advanced driver assistance systems (ADAS) first to the luxury end of the market, then more widely.”

“Research suggests that these technologies prevent crashes. Depending on [the] price, there is [a] public appetite for them. Historically, it takes 15 years for new technology to penetrate 95 per cent of new car sales, a further 15 years to fully penetrate the fleet. However, it could be quicker this time around given the sea change in customer experience.”

Autonomous Research expects fully driverless cars to be available worldwide by 2064.