Auto Insurers to feel the pain of Connected Society and Asset-Lite Consumers
When confronted with a structural change, like the one posed by the combination of self-driving auto technology and the psychographic shift toward fewer people owning cars instead opting for Uber, Lyft, Zipcar and the like most tend to contemplate the first derivative. Often times though the ripple effect to be had is far larger and in this case if fewer cars are being sold, it means fewer auto insurance policies at State Auto Financial Corp., Geico and Progressive are likely to be written and paid for.
Each of these trends could dent the global auto insurance industry. As they begin to converge, the damage could be irreparable. In mature markets, auto insurance could drop by as much as 80% by 2040, according to a recent Blue Paper report from Morgan Stanley Research and Boston Consulting Group (BCG), “Motor Insurance 2.0.”
The report, which includes findings from a proprietary global consumer survey and market modelling, looks at how transportation is changing, how the insurance industry is trying to reposition, and what it mean for investors, related sectors, policy makers, and consumers.
Source: Are Auto Insurers on Road to Nowhere? | Morgan Stanley