The California automobile insurance industry is part of a thriving national enterprise valued at more than $220 billion and employing more than 270,000 people around the country. According to the Bureau of Labor Statistics, this is roughly the same amount of mechanical engineering jobs.
As automated cars are being tested in California, and it is becoming clear that they are extraordinarily safe, there are some concerns that the insurance industry may suffer. After all, without the damages caused by fatal and serious accidents every year, the industry has greatly reduced opportunities to earn the profits necessary to stay in business.
This is not entirely without negative side effects. For example, the insurance industry's ability to accurately estimate risk and determine the possibilities of harm from proposed courses of action have long been relied upon by governments and political policy groups. It is believed that the direct connection between the industry's ability to evaluate risk and its profitability engender quality assessments and actuarial data. However, as self-driving cars begin to remove the risk from driving, there is no clear answer as to what will become of the insurance industry and the people that work within it.
Google has reported that a few of its vehicles have been in minor collisions, but no injuries have resulted. The company acknowledged that one such minor accident was attributable to software. Some autonomous car manufacturers have indicated that they will self-insure their vehicles until the insurance issue can be straightened out. Personal injury attorneys will no doubt be keeping their eyes on future developments.
Source: Forbes, "No, Self-Driving Cars Won't Kill the Insurance Industry", Patrick Lin, April 25, 2016