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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 fill, Berkshire CEO Warren Buffett said the use of AI in self-driving vehicles will convey fewer moves and fewer clients for the company's Geico insurance produces .
Turns out Buffett may have spoken too soon. Harmonizing to a brand-new report from Accenture, the overall automobile coverage will actually grow in the future, forming $81 billion in new income between 2020 and 2025.
The report, published under Thursday, explains that self-driving vehicles will lead to a big drop in individual insurance premiums. But that drop will be more than compensated for by new categories of automobile policy, especially ones related to cybersecurity, which Accenture does will be worth $12 billion in 2025.
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The report also points to new opportunities in produce liability insurance related to autonomous vehicles( foreseen significance of $2.5 billion) and a smaller opportunity ($ 0.5 billion) in the form of insuring infrastructure like mas estimating that will be needed to run sails of driverless vehicles .
Here is a map that shows how Accenture reputes the new produces will, for a term, buoy the auto policy grocery even as sales conventional premiums begin to stop and nosedive :
According to John Cusano, the world head of insurance for Accenture, many auto insurance argues in the future will differ than ones we see today. For instance, insurers will have to pay out for occurrences such as faulty AI makes or a hacker embezzling personal data from a vehicle. Cusano adds that the new opportunities are significant but not every insurance company is equally positioned to take advantage of them .
" Obviously, the ones who will be most invited is likely to be those on the retail side of the business since the brand-new perils are on the commercial back. Retail insurers will have to transform their business along the way ," he tells Fortune .
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This hints the likes of Geico will indeed face stres but that they still have time to adapt and grab a share of the commercial-grade marketplace. And in the short term, Cusano announces the growth of autonomous vehicle engineering will actually bolster retail insurers. That's because cars now come with most expensive AI-related technology, like cameras and sensors, which originate the costs of restoring a fender bender much higher than it used to be.A final wild card in automobile policy markets of the future is the potential entry into the business of manufacturers. Cusano answers Tesla's small attacks into the insurance sells could expand. Meanwhile, Google is expending its sail of self-driving a motor vehicle is amass vast troves of risk-related data, which could settled the search monstrous in a position to join other new entrants as a intense entrant in the insurance marketplace .Thank you for read this article
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