Table 1: Mean Value, standard deviation and variation coefficient of the single motor insurance risks covered. Own calculation based on insured loss amounts of the single risks between 2006 and 2015
Table 1: Mean Value, standard deviation and variation coefficient of the single motor insurance risks covered. Own calculation based on insured loss amounts of the single risks between 2006 and 2015Quelle: IAA 2017
Erschienen in Ausgabe 3-2019Politik & Regulierung

Partner on equal terms

How reinsurance companies and OEM Groups can benefit from each other in future motor insurance market

Von Fabian PützVersicherungswirtschaft

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Technological progress always has had a strong influence on humans´ mobility behavior. However, since the first automobile revolution initiated by the invention of the combustion engine by Carl Benz in 1886, the technological capability of automobile vehicles was rather affected by evolutionary than by revolutionary developments. Stating this, recent technological advance in the field of computer, communication and sensor technology makes it feasible that automated driving vehicles become reality in the nearer future. Together with an increasing interconnection of these vehicles, this has a strong direct impetus to the automobile and transportation sector. In addition to these sectors, also downstream businesses will potentially be strongly affected by the progression in connected automated vehicle (CAV) technology. In particular, the insurance sector is one of the core indirect downstream markets acutely sensitive to the adoption of emerging technology. This is because the insurance sector assumes risks resulting from the use and production of motor vehicles on an individual but also societal level.
Motor insurance is worth € 133 bn (2015) and accounts for about 39 % of the total premium volume of the European non-life insurance market and thus is the most important line of (non-life) insurance business measured by premium volume [1]. Given this relevance, changes in the automation capability of modern vehicles and accompanying changes in societal mobility patterns have the potential to affect the motor insurance sector profoundly. Most apparent, an expected increase in road safety induced by CAVs has a direct impact on the number of road accidents. If effective, the decreasing number of road accidents ceteris paribus decreases the overall loss expenses and -given the high competition in the motor insurance market- in turn reduces the overall premium volume of the motor insurance business. However, a holistic assessment of the net alteration of the inherent risk exposure has also to consider accompanying emerging risks such as the risk of remote cyber-attacks and the risk of software and hardware failure of the vehicle system. 
Given this general scope of analysis, the impact to the insurance sector as such cannot be answered with a uniform and general applicability to all members of the insurance supply chain. This is because different (re)insurers and insurance groups of the market show different characteristics and conditions (e.g. risk-taking…