August, 19 2021
Automation
Autonomous rides through Lyft could start this year
What: Ford, Lyft, and Argo AI are teaming up to launch self-driving cars in Miami this year. The vehicles will still have someone at the steering wheel for safety, but this initial test will be key in gathering real world data in advance of adding more cities next year.
Why it matters: Autonomous vehicles create a new litigation problem that is yet to be faced by the insurance industry: among the driver, the AI, the manufacturer and the operator, who will be responsible when something goes wrong?
As a parent, I would love to have an autonomous car. Constant focus is something that computers can do that we can’t and should mean enhanced safety on the road.
Read: Lyft will team up with Ford and a self-driving car start-up to offer rides in Miami.
Societal shift
Young people are opting out of becoming licensed drivers
What: With additional transportation options now available, some young drivers are choosing not to get a drivers license. The number of 16-year-olds with licenses has steadily decreased in recent years and now sits at 25%, with only 61% of current 18-year-olds now holding a license.
Why it matters: This is a significant indicator of societal change that will greatly impact the auto insurance market. The easy mobility that was once only available only in larger cities with public transit now is available almost anywhere, and people are wondering whether they even need to drive at all, which affects how insurers should be thinking about auto insurance.
Industry Challenge
Several states propose a ban on credit-based car insurance pricing
What: Using a person’s credit score as a factor in pricing car insurance might soon be illegal in Colorado, New Jersey, New York, and Oregon. Having poor credit or no credit history is more prevalent among consumers of color, and is therefore an example of unfair price discrimination.
Why it matters: With the availability of high quality data and analytics, the insurance industry can more easily find and adapt to these sorts of adverse limitations. It’s often hard initially to see the implications of rating on certain variables, so having flexibility in data sources and types will be a significant competitive advantage going forward.
Read: Bad credit shouldn’t affect car insurance, experts say. States are listening
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