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Policyholders could have lower auto fleet insurance premiums as autonomous and other intelligent technologies improve and there are fewer accidents, according to a Moody’s Investors Service report issued Wednesday.
“As advanced autonomous vehicles become prevalent, accident frequency is likely to fall precipitously over time, and could ultimately translate into significantly lower loss costs and premiums for auto insurers,” says the report on autonomous vehicles.
“Profits are likely to also decline, since most insurers set profit targets as a percentage of premiums,” it said.
Auto liability could also shift, the report says. “Regulators, lawmakers and courts will have to determine how liabilities for accidents caused by autonomous vehicles are shared among automobile manufacturers, technology companies, drivers, and their insurers,” it said.
“Some, albeit smaller, demand for specific auto-related insurance coverages such as product liability for automakers could remain.”
In a separate report on electric vehicles, Moody’s says these are more expensive to repair, and battery and electric cable placement make them more likely than internal combustion engine vehicles to be a total loss, even in minor collisions.
As the fleet share of electric vehicles increases, “insurers will need to proactively incorporate the changing fleet composition into the liability portion of their pricing plans, which covers damage to third-party vehicles,” it says.
The report says electrical vehicle fires “are much more difficult to contain than gasoline fires” and a greater share of these fires occur when a vehicle is parked, “which can damage homes and businesses.
“Insurers regulators and the courts will need to work out who will be liable for these claims,” the report says.