- Motor & Fleet
- Will autonomous vehicles really slash insurance costs?
Goldman Sachs says expect 50% premium reductions – but the reality is that won’t be happening any time soon
By Matthew Sellers
While the headlines trumpet fewer crashes and cleaner safety records, the implications for the multi- billion auto insurance sector are anything but straightforward. With companies such as Waymo, Tesla, and China’s Baidu advancing robotaxi programmes in key cities – from Austin and Phoenix to Guangzhou – the sector is poised not merely for disruption, but a fundamental rethinking of what it insures and how.
From driver fault to system failure
Historically, motor insurance has rested upon the simple premise of human fallibility. Risk assessment hinged on driver behavior, age, history, and geography. Autonomous technology unsettles that premise. As liability migrates from the individual to the algorithm, insurers must grapple with a paradigm shift toward product liability, software integrity, and cyber vulnerability.
Indeed, Goldman Sachs projects that per-mile insurance costs could fall by over 50% by 2040, as machin…