Driverless Vehicles: Massive Disruption to the Insurance Industry28 Oct

According to a RAND Corporation study, “Self-driving vehicles offer the promise of significant benefits to society, but raise several policy challenges, including the need to update insurance liability regulations…”

A major benefit of driverless vehicles pertains to a potentially massive reduction in traffic accidents. For example, “In 2012, 33,561 people died in motor vehicle traffic crashes in the United States…In 2012, an estimated 2.36 million people were injured in motor vehicle traffic crashes…”

“The highest price we pay for car crashes is in the loss of human lives, however society also bears the brunt of the many costs associated with motor vehicle accidents. According to the National Highway Traffic Safety Administration (NHTSA), U.S. motor vehicle crashes in 2010 cost almost $1 trillion in loss of productivity and loss of life.”

Given these statistics, it may be concluded that humans are atrocious drivers. Driverless vehicles could conceivably reverse this terrible situation. However, this all encompassing societal benefit due to driverless vehicles may lead to a significant loss of revenue by the automobile insurance industry. Thus, this group may interject significant ‘road blocks’ to curtail regulatory acceptance of the driverless vehicle industry by Congress.

The insurance industry holds considerable influence over Congress by means of political campaign contribution given by them. For example, “In the 2012 election cycle, the insurance industry contributed a record $58.7 million to federal parties and candidates as well as outside spending groups.”

It remains to be seen whether the American political system is more interested in saving lives or the insurance industry.

J. H. Everson SBIR Consultant

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One Response to “Driverless Vehicles: Massive Disruption to the Insurance Industry”

  1. Driverless Vehicles – Are American Roads Ready? | JHEverson Consulting Reply

    […] Repaving 3 million miles of roadways for the benefit of driverless vehicles may slow the commercialization of this form of transportation to a crawl. This effect may delight the auto insurance industry, which could otherwise witness a huge loss of revenue because driverless vehicles are inherently safer than vehicles under human control. Thus, the demand for auto insurance may drastically plummet with the advent of driverless vehicles. This insurance issue was addressed in my previous post. […]

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About Dr. Everson

Prior to forming this SBIR consultant practice, Dr. Jeffrey Everson was director of business development for QinetiQ North America’s Technology Solutions Group (previously Foster-Miller, Inc.).

Dr. Everson has won and been the principal investigator for several SBIR programs, including a Phase I program for NASA, a Phase I project for the U.S. Air Force, and Phase I and II contracts from the U.S. Department of Transportation. For the Phase II program, he received a Tibbetts Award for exemplifying the best in SBIR achievement.

Previously Dr. Everson held senior scientist positions at Battelle Memorial Institute, The Analytic Sciences Corporation (TASC), Honeywell Electro Optics Systems Division, and Itek Optical Systems Division.

He holds a PhD in physics from Boston College and a MS/BS in physics from Northeastern University.


For more information about how JHEverson Consulting can help your company with its SBIR and STTR proposals, please contact Jeff Everson.

JHEverson Consulting is based in the Boston area but consults for clients throughout North America. It also is supported by affiliated consultants.