Self-driving cars aim to reduce the number of traffic deaths on public roads and also reduce congestion, however what may be good for the general public won’t be good for automotive insurance companies, according to Berkshire Hathaway’s Warren Buffet.
Buffet rightly explained during Berkshire Hathaway’s annual meeting on Saturday that if driverless cars do become extremely widespread, it will only be because of their high safety relative to passenger vehicles. If such were the case, insurance premiums would likely plummet, taking a negative toll on companies like Geico, which Berkshire Hathaway owns a majority stake in.
“If they make the world safer it’s going to be a very good thing, but it won’t be a good thing for auto insurers,” Buffett said.
“If driverless cars became pervasive it would only be because they were safer,” he added.. “That would mean that the overall economic cost of auto-related losses had gone down and that would drive down the premiums”
Fiat Chrysler is currently in partnership with Google’s Waymo self-driving car offshoot to provide the tech company with its Chrysler Pacifica Hybrid, which it then outfits with its autonomous vehicle hardware and software for testing purposes. The two recently expanded on the partnership, with Google ordering an additional 500 Pacifica Hybrids and starting up a test program for the public in Phoenix.
Via Business Insider