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The Oracle of Omaha this month was indicated that artificial intelligence constituted a threat to Berkshire Hathaway's auto insurance business. Voicing at the company's annual cros, Berkshire CEO Warren Buffett said the use of AI in self-driving vehicles will want fewer operators and fewer purchasers for the company's Geico insurance commodities .
Turns out Buffett may have spoken too soon. According to a new report from Accenture, the overall automobile insurance will actually grow in the future, making $81 billion in new income between 2020 and 2025.
The report, published under Thursday, explains that self-driving gondolas will lead to a big drop in individual insurance premiums. But that put will be more than offset by new categories of vehicle policy, especially ones related to cybersecurity, which Accenture answers will be worth $12 billion in 2025.
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The report too points to new opportunities in produce drawback insurance related to autonomous vehicles( foreseen value of $2.5 billion) and a smaller opportunity ($ 0.5 billion) in the form of insuring infrastructure like shadow computing that will be needed to run fleets of driverless vehicles .
Here is a graph that shows how Accenture trusts the brand-new commodities will, for a age, buoy the automobile assurance busines even as sales conventional premiums begin to stop and fall :
According to John Cusano, the world head of insurance for Accenture, many vehicle insurance affirms in the future will differ than ones we see today. For speciman, insurers will have to pay out for incidents such as erroneou AI produces or a hacker plagiarizing personal data from a vehicle. Cusano adds that the new opportunities are significant but not every insurance company is similarly positioned to take advantage of them .
" Obviously, the ones who will be most requested will be those on the retail place of the business since the new jeopardies are on the commercial back. Retail insurers will have to transform their business along the way ," he tells Fortune .
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This proposes the likes of Geico will indeed face stres but that they still have time to adapt and grab a share of the business busines. And in the short term, Cusano says the growth of autonomous vehicle technology will actually bolster retail insurers. That's because automobiles now come with most expensive AI-related technology, like cameras and sensors, which represent the costs of repairing a fender bender much higher than it used to be.A final wild card in vehicle insurance sells of the future is the potential entry into the business of creators. Cusano articulates Tesla's small forays into the insurance groceries could expand. Meanwhile, Google is consuming its sail of self-driving a motor vehicle is amass huge troves of risk-related data, which could put the search beings in a position to join other new entrants as a intense competitor in the insurance busines .Thank you for read this article
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