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Comment by Thorrez | Hacker News Reader

>If you are today a big insurance like Munich Re, and you see already today that self-driving produces already much less accidents (90% or so I read days ago?), and the tech is really new & "not 100% reliable" and you believe that this tech will be rolled out - one day you will start lobbying politicans that manual driving needs to be forbidden, except some rare cases.

Why would insurance companies lobby for that? 90% reduction in accidents means 90% reduction in premiums, which means 90% reduction in profits.

Do insurance companies have a history of lobbying for safety regulations?

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Oh sure, they have!

e.g.: https://www.insurance.ca.gov/01-consumers/200-wrr/Safer-from...

And sure, insurances are fine with making profits, but if they can get less catastrophes, they are fine with that as it reduces overall risk etc.

Feel free to check the corp publishing section on https://www.munichre.com/en/insights.html

That 1st link is the CA government, not an insurance company. Also, it doesn't seem to be a regulation requiring people to do something. It's something people can optionally do, and if so, get a discount on insurance. That's not insurance companies pushing for regulation, it's insurance companies offering a competitive price to both high-risk and low-risk houses, similar to how car insurance companies base their rate based on how risky of a driver they estimate the person to be.

But fire insurance is different from auto insurance. Insurance companies want uncorrelated risk. Insurance companies want a high rate of car crashes, but the exact same rate of car crashes each year, because that makes planning easy. If there's a risk that in a some years way more crashes will happen than other years, that's correlated risk and makes planning difficult; they don't want that.

For cars, there's not much correlated risk. For fire insurance, there is correlated risk due to wildfires. So to reduce correlated risk, insurance companies do likely want to reduce wildfires, while still wanting to increase non-wildfire fires.

Self-driving cars will increase correlated risk, because there could be some software update with a bug that's pushed out and causes a ton of crashes. (That risk does also exist with cars today, due to the various software in cars, but self driving increases the risk.)

The 2nd link is an insurance company, but it as well doesn't seem to be advocating for regulation.

You have a point. At the same time insurance companies are getting out of insurance because they can't afford it. Apparently (I didn't verify this), the cost to repair cars has gone up so much that the economics don't work out. So they're leaving the market. Maybe less crashes would bring them back?

Pick a source: https://www.google.com/search?q=car+insurance+companies+leav...

I believe in CA, the reason for pulling out is that CA limits the amount the companies can increase premiums[1]. So less crashes is one way to bring them back. Allowing them to increase premiums more is another way to bring them back.

[1] https://old.reddit.com/r/explainlikeimfive/comments/1c7lm5b/...

Insurance is cheaper on safer vehicles.

A 90% reduction in accidents is a 90% reduction in _paying out_. That reduces operating costs.

Insurance companies aren't a monopoly. They're in competition with each other to offer lower rates. So if there's a reduction in paying out, they'll need to reduce their premiums to stay competitive with each other.

They can charge companies more, as they drive more miles, for profit.

Good point that more miles driven might increase both accidents and premiums and thus increase insurance company profit.

However, how many more miles will they drive? Double? If there's a 90% reduction in accidents as KellyCriterion alluded to, then the total number of accidents will still go down. That means total premiums will go down, and total profit will go down.

Reduction in premiums doesn’t mean reduction in profit.

Aren't insurance profits capped to some percentage of revenue in most jurisdictions by law?

Yes, this is true - but it’s still beneficial enough to have fewer claims. Claims incur cost in many ways and running a business with fewer claims would be more predictable and likely worth the minimal trade off.

It generally does. If accidents (and payouts) drop by 90%, revenue will ultimately drop and profits will follow. Profit margins may increase, but total profit $$ will likely drop.

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