Driverless Cars Challenge Insurer Stress Tests, BOE Warned

Law360, London (March 17, 2017, 3:21 PM GMT) -- Driverless cars will put the brakes on the U.K. motor insurance market and challenge the way firms develop capital models and internal regulatory stress tests, according to a Bank of England paper published Friday.

The report’s authors predicted the motor insurance market would contract by 21 percent by 2040 as computers increasingly take the wheel. But they predict that insurers’ capital requirements, which ensure firms can afford payouts without going bankrupt, will fall only 12 percent in the same period.

Such bumps in the road will...
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