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The Oracle of Omaha this month warned that artificial intelligence poses a threat to Berkshire Hathaway's auto insurance business. Pronouncing at the company's annual confront, Berkshire CEO Warren Buffett said the use of AI in self-driving cars will entail fewer moves and fewer purchasers for the company's Geico insurance concoctions .
Turns out Buffett may have spoken too soon. Harmonizing to a brand-new report from Accenture, the overall vehicle coverage will actually grow in the future, creating $81 billion in new receipt between 2020 and 2025.
The report, published on Thursday, was explained that self-driving autoes will lead to a big drop in individual insurance premiums. But that fell will be more than offset by brand-new categories of automobile guarantee, especially ones related to cybersecurity, which Accenture speaks will be worth $12 billion in 2025.
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The report too points to new opportunities in product drawback insurance related to autonomous vehicles( prophesied appreciate of $2.5 billion) and a smaller opportunity ($ 0.5 billion) in accordance with the arrangements of insuring infrastructure like gloom computing that will be needed to run sails of driverless vehicles .
Here is a chart that shows how Accenture belief the brand-new products will, for a age, buoy the automobile guarantee grocery even as auctions conventional premiums begin to stall and fall :
According to John Cusano, the global head of insurance for Accenture, numerous auto guarantee alleges in the future will differ than ones we see today. For instance, insurers will have to pay out for happens such as imperfect AI commodities or a hacker embezzling 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 challenged will be those on the retail place of the business since the new perils are on the commercial-grade area. Retail insurers will have to transform their business along the way ," he tells Fortune .
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This shows the likes of Geico will indeed face pressure but that they still have time to adapt and grab a share of the commercial-grade busines. And in the short term, Cusano alleges the growth of autonomous vehicle technology will actually bolster retail insurers. That's because cars now come with most expensive AI-related technology, like cameras and sensors, which obligate the cost of restoring a fender bender much higher than it used to be.A final wild card in automobile guarantee marketplaces of the future is the potential entry into the business of manufacturers. Cusano announces Tesla's small forays into the insurance groceries could expand. Meanwhile, Google is working its sail of self-driving vehicles to amass big troves of risk-related data, which could applied the search giant in a position to join other brand-new entrants as a ferocious opponent in the insurance market .Thank you for read this news
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