Shop Insurance Canada: Forecasts of Gloom in the Auto Insurance Industry Should Make Companies Act

July 6, 2016 - Shop Insurance Canada, a leading Toronto-based online auto insurance expert, says the industry is regularly being told that ride-sharing and autonomous technology will disrupt insurers. However, while these predictions are true, companies can act now and prepare for those industry changing events.

Changing times in the auto insurance industry may present problems for companies over the next decade, sparking a 10-year downturn in business. That is the assessment according to consulting firm Deloitte, which cites expanding customer needs and the introduction of technology that could lower collisions.

The company says autonomous technology and other changes predicted in the market over the coming years will result in a 30 per cent decline in premiums over the next 25 years.

In its report, titled "Insuring the future of mobility: The insurance industry's role in the evolving transportation ecosystem," Deloitte looked at several aspects of the industry to determine what changes will affect the industry. The following changes in the transportation dynamic will have an impact on auto insurance premiums:

Autonomous vehicles leading to reduced accident rates and a lower claims frequency

Carpooling and ride-sharing becoming a common commuting strategy, resulting in a lower number of vehicles

Personal auto coverage declining in favor of ride-sharing commercial policies and product liability coverage.

However, it is not all bad provided the insurance industry can keep pace with the changes by innovating new product lines and solutions to cover declines elsewhere, says Shop Insurance Canada. Agents and brokers may be the worst affected by technological change as their personal lines will likely reduce over the next 10 years:

"While technology could hit the auto insurance industry hard, it does not have to be terminal. Companies can also use technology, such as telematics and usage-based insurance (UBI), to create a new environment. Working with vehicle manufacturers is also an avenue insurance providers can explore to help offset the impact of autonomous vehicles. Companies must start putting these plans into action now and not wait for the technology to make its impact."

The report advises insurance providers to bolster their commercial lines or risk being among the first affected when personal insurance coverage declines in the coming years.

About Shop Insurance Canada
Shop Insurance Canada is a Toronto based company that specializes in delivering the best auto insurance products to customers around Ontario and Canada. The online insurance quoting tool uses an engine that is easy to use and accurate enough to deliver the best auto insurance quotes from over 25 of Canada's leading providers. Shop Insurance Canada also offers expert advice on the auto insurance industry, as well as guides and news to help customers find the best deal possible.

Shop Insurance Canada
1003-60 Bathrust St.
Toronto, Ontario
M5V 2P4
Canada
416-913-0151