The other side of an emerging technology
At Tematica Research, we identify investment themes — or thematics as we refer to them at Tematica — by looking at the intersection of shifting economics, demographics, psychographics, technologies, mixed in with regulatory mandates and other forces. To put it more simply, we look at the real world that companies are operating in, and try and understand what’s happening and why.
One such thematic we track is Disruptive Technologies, and like all of our thematics, we look at both sides of the coin — who wins and who loses as an emerging theme takes hold and moves into the mainstream.
This article in today’s Wall Street Journal is a perfect example of potentially the losing side of a much talked about part of the Disruptive Technology, driverless cars and its impact on the car insurance business. Clearly, the most recent episode with Tesla’s driverless option is not only adding a brief slowdown in the progression of this technology, but might also drive short-term increases in car insurance premiums. Long-term however, it does raise the issue of what that business could look like 10-15 years down the road. Too far out to act on from our perspective on a thematic investing angle, but something to take not of and monitor.
Car insurers last year hauled in $200 billion of premiums, about a third of all premiums collected by the property-casualty industry. But as much as 80% of the intake could evaporate in coming decades, say some consultants, assuming crucial breakthroughs in driverless technology make driving safer and propel big changes in car ownership.
Source: Driverless Cars Threaten to Crash Insurers’ Earnings – WSJ
