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90% of insurance companies unprepared for autonomous vehicle introductions, says KPMG

Date: 19 July 2016   |   Author: Daniel Puddicombe

The vast majority of motor insurance companies are unprepared for the arrival of driverless vehicles, research from audit company KPMG has revealed.

According to the firm's study - the Autonomous Vehicle Insurer report published this month - only one in 10 insurance companies have developed plans to help businesses navigate the switch to self-driving vehicles.

Only a third of insurance firms, meanwhile, have held discussions regarding autonomous vehicles, while just over 40% (42%) said they are not investing in their business models to prepare for the arrival of the technology.

According to KPMG, a third of insurers believe that it will take at least 10 years for driverless vehicles to impact the automotive industry, while the vast majority - 67% - said it would take at least two decades.

"We are surprised that many insurers have been slow to react to the current technological changes taking place in the automotive sector.  Driverless vehicle technology will radically change the insurance market and in our view disruption will happen faster than most insurers think," said Murray Raisbeck, insurance partner at KPMG. "Insurers need to overcome their apathy towards driverless vehicles.  There are clear opportunities to develop new income streams for those firms that are prepared to step out of the pack and embrace the changes taking place in the sector."