In its latest quarterly bulletin, the Bank of England has shared research showing that while the development and uptake of autonomous vehicles is likely to be gradual, it may still lead the UK motor insurance market to contract by as much as 21% by 2040.
According to an article by members of the Bank’s General Insurance Division, while such a market contraction has the potential to disrupt the motor insurance sector, a gradual introduction of autonomous vehicles may allow time for insurers to adapt.
The Bank also highlighted that aspects of the current insurance value chain, such as claims management, underwriting and product development, are likely to need to be transformed as autonomous vehicles are introduced.
With the arrival of automated vehicles, the Bank expects future success in the insurance industry to rely on partnerships between insurers and technology firms and manufacturers.
The dedicated research on autonomous vehicles was the first such research conducted by the Bank, which used a questionnaire to gather the views of technology and insurance experts.
The survey results also suggest that autonomous vehicles could account for 80% of new vehicle sales by 2040.