There is an opportunity for captive insurers in the autonomous vehicle space, according to Peter Tomopoulos, senior manager of Deloitte Consulting’s actuarial, rewards and analytics.
Speaking at the ‘the cognitive captive: artificial intelligence for smarter insurance’ session at the Vermont Captive Insurance Association 2018 Annual Conference, Tomopoulos predicted that many of the needs of autonomous vehicle industry could be met by captives.
He explained: “Captives have a number of benefits that can apply to this emerging technology.”
“Captives cover specialised risks that are difficult to underwrite, that sounds a lot like what is going to happen, particularly early on, with autonomous vehicles.”
“They can also lower insurance costs and reduce the risk of their parent’s balance sheet, as well as filling coverage gaps.”
Tomopoulos suggested that the autonomous vehicle industry should also offer some incentives for captive insurance companies.
He commented: “Large companies like Uber, Lyft and car manufacturers themselves own very big fleets and will be large enough that they can self-insure, only going to the commercial market for reinsurance.”
“Any company along the supply chain may benefit from captives or other risk management options, and we may see car manufacturers pooling their risks together.”
According to Tomopoulos, the industry will see a transformation in insurance products, with subscription and usage-based models becoming increasingly important, and captives offer the flexibility to tailor such policies and to bundle products.
He concluded: “All these new risks will create opportunities for captives.”
