The Greek philosopher Heraclitus is credited with coining the phrase "the only constant is change". Odds are he wasn’t predicting the current state of auto insurance, but those words ring true today as we look at this ever-changing marketplace. Lately there has been a lot of discussion about auto insurance, and varied opinions around the future of the largest line of P&C business. Nobody knows exactly what the auto insurance market will look like in 20 to 30 years, but it will be vastly different than it is today. AAIS Auto Product Manager Casey Brewer outlines the forces currently reshaping the market. Following are excerpts that summarize "The Trifecta of Disruptive Trends" affecting the Personal Auto Insurance market.

Over the past decade, a steady flow of disruptive forces has impacted the personal auto insurance market. The advent of telematics and usage-based insurance products ushered in new ways for insurers to collect, develop, and utilize large volumes of refined, driver-focused data to assess and price risk more accurately. On the heels of this wave came the rise of the sharing economy, which heralded a shift in consumer behavior and the creation of all new risk exposures, with individuals serving as taxi drivers or car rental agencies. Now, with the rapid development of autonomous vehicle technology that promises to reduce or even eliminate driver behavior from the personal risk equation, the market faces what is perhaps the greatest disruption yet. This shifting landscape continues to create myriad challenges and opportunities for carriers to address.

Telematics provide insurers with access to vast amounts of data. The majority of carriers that have implemented these types of programs have experienced improvements in risk pricing and claims processing, increased customer satisfaction and retention, as well as reduced costs. In addition to the benefits that carriers have reported, customers are able to take advantage of premium discounts, improved service and claims experiences, and in many instances direct feedback on driving habits that can help improve behavior behind the wheel.

Unlike the rise of telematics, which has fueled a greater understanding of driving behavior, the sharing economy has resulted in significant changes in behavior. With the introduction of transportation networks and personal vehicle sharing programs, activities once limited to businesses and commercial auto insurance are now suddenly and irreversibly in the realm of private vehicles and personal auto insurance.

Into the chaos of this rapidly evolving personal auto insurance market comes a whole new technological revolution. Autonomous vehicles bring the promise of driving themselves with little or no human interaction. Once the realm of science fiction, driverless cars are now closer than ever to becoming reality. Vast resources have been committed across the manufacturing and technology industries to develop sophisticated and intelligent systems that can bring autonomous vehicle solutions to market on a mass production scale within the next 3 to 5 years.

This technology could potentially eliminate all human error, a factor in more than 90 percent of all automobile accidents. The reduction in auto accidents could also save more than 40,000 lives each year.

Contact your AAIS Personal Auto expert for a copy of the full report or visit www.AAISonline.com.