this post was submitted on 20 Apr 2024
580 points (96.9% liked)
Technology
59534 readers
3223 users here now
This is a most excellent place for technology news and articles.
Our Rules
- Follow the lemmy.world rules.
- Only tech related content.
- Be excellent to each another!
- Mod approved content bots can post up to 10 articles per day.
- Threads asking for personal tech support may be deleted.
- Politics threads may be removed.
- No memes allowed as posts, OK to post as comments.
- Only approved bots from the list below, to ask if your bot can be added please contact us.
- Check for duplicates before posting, duplicates may be removed
Approved Bots
founded 1 year ago
MODERATORS
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
Berkshire Hathaway owns Geico the car insurance company. In one of his annual letters Buffett said that autonomous cars are going to be great for humanity and bad for insurance companies.
“If [self-driving cars] prove successful and reduce accidents dramatically, it will be very good for society and very bad for auto insurers.”
Actuaries are by definition bad at assessing new risk. But as data get collected they quickly adjust to it. There are a lot of cars so if driverless cars become even a few percent of cars on the road they will quickly be able to build good actuarial tables.
His statement is extremely flawed - insurance companies dream of accepting premiums and never paying out accidents.
He understands there is enough competition in the market that as payouts and accidents go down premiums will have to. There is enough competition they can't just keep rates high they would be undercut and lose customers.
For BH it's doubly bad as the large cash reserves GEICO has to maintain are used to borrow against at very low rates. If those reserves drop he has less to borrow against for investing.
If I wanted to be cynical, it's also that it's a bit different when it's not Average Joe asking for a payout, but Mercedes, for example. It may shift the legal playing field with the insured parties not being consumers, but car manufacturers. Even worse for insurers, car manufacturers would be more successful in negotiating the initial deal as well.
I would agree it’s bad for insurance company employees. But the purpose of an insurance company is to collect premiums and deny claims.
Get hurt in america, your insurer will hold a demo!
When you're clients are a handful of companies who will more aggressively change insurers than consumers to save a penny and have their own legal teams, it becomes harder to price gouge or illegally deny claims.
Yes, clearly Warren Buffet is the one in the wrong here. 🤔