The CHANGE is inevitable (Car Insurance Industry)

The only thing that is constant in life is CHANGE!

Nokia's journey from being awesome to awful and from being pioneer to a little player best shows the importance of recognizing the need for CHANGE!. In 1990s Nokia was the market leader, but in the lust of leadership it meekly ignored the change which the mobi-tech industry was experiencing and within a few years it ran out of business.

A few decades later (in the future), a similar diversion is approaching i.e. when the automated cars will hit the roads. An era where drivers will delegate their cumbersome job to machines. For instance, BMW is rolling out a car that can park itself, Cadillac has a model coming that drives hands-free on the highway, Google is on the verge of releasing a driverless car.

The Boston Consulting Group estimates that self-driving cars may account for a quarter of global auto sales by 2035. At the risk of stating the obvious, all of this would imply less road accidents, injuries and hence less driving risk. Yes, indeed, it will be Good For The Whole World..

But wait! what about those who earn from the existence of accidents risk? Yes, I meant to say 'Car insurance companies'. Warren Buffet (one of the richest man alive) recently said "Anything that cuts accidents by 30%, 40%, 50% would be wonderful, but we would not be holding a party at our insurance company." Thats sums it up. The automation will definitely impact the car insurance industry.

Those car insurance companies who would opt for the Nokia approach (i.e. being complacent and ignoring the need for Change) will find themselves on the losing side. No.. by all means that doesn't mean that the car insurance industry has a bleak future. Indeed, the glass is half empty but its half full too. Its just a matter of perspective.

They say, if there is a curve on the highway you need to tilt the steering to avoid off-roading. And that applies to car insurance industry too. The introduction of automation will open new doors for selling car insurance products (in a different packaging). As cars become more automated, networked and self driven there will be a demand for insurance products to avoid hacking of car systems, malfunction of self-driven systems and much more.

There will be a demand for insurance coverage from carmakers and those who develop and install the automation systems. Because if these "Jetsons" (Automated Cars) malfunction the car-makers could find themselves in trouble. Surely, there will be a new dimension, that the focus of car insurance industry would shift from the car users to manufactures.

The bottom-line is, that it's just a matter of gauging the Change and tiling the steering as the highway takes its curve, otherwise, several car insurance companies might find themselves off-roaded!!