Insurers must prepare for the ‘messy middle’ of journey towards autonomous vehicles – Zego’s Sten Saar

Insurance firms operating in the motor market must “develop a plan” for the transition to a society with more and more autonomous vehicles if they want to remain in business long-term.

That was according to Sten Saar, chief executive at motor Insurtech Zego, who spoke this morning (20 March 2025) at Insurtech Insights.

In his session, entitled The end of car insurance – why the biggest disruption is yet to come, Saar laid out how the transitory period from human-operated vehicles to a world of autonomous vehicles would present significant risks for insurers, especially those unprepared to adapt. 

He called this transitory period “the messy middle”, adding that the business environments either side of this phase – with either fully human-operated or autonomous vehicles – were “actually pretty simple worlds to operate in” for insurers. 

Saar explained: ”With human-operated vehicles, we have decades of data and understand the types of vehicles and how they’re driven. The biggest challenge is going to be the messy middle, where we start to go from 100% human-operated vehicles to 90% and then 80% and so on. We are not going to have historical data here.

”These are challenges to immediately start thinking about solving – because that’s where the winners and losers in auto insurance will be defined.”

Horse and cart

Saar told delegates at Insurtech Insights that he thought the transition to a society that employed nearly 100% autonomous vehicles would take 13 years in a “best case scenario” and 40 years “in the worst case scenario”.

He also compared this change in transport methods to the introduction of the automobile and how it replaced horse and carriage transport. 

He described Zego as “a behaviour-based motor insurer” that “was full stack and fully vertically integrated” with sales, distribution, policy administration and claims as well as pricing and underwriting. The firm is focused on providing the cheapest possible motor insurance to the most safe drivers, which it assesses through mobile phone telematics data. 

Saar said that the majority of motor insurance claims were caused by factors such as fatigue, distraction or speeding, which are currently underwritten via proxies such as age, occupation and engine size.

However, autonomous vehicles would not require insurance for these human issues.

He explained: ”In an autonomous world, it’s no longer a human turning the wheel. What we really need to think about here is cyber risk, the hardware, public liability and so forth.

”The use of a vehicle also becomes very different. Where today we insure for personal use, autonomous vehicles could become part of commercial fleets when not in use, so we need to figure out the risk when the line between personal and commercial gets very blurred.”

The mix of these considerations for insurers is what leads to the messy middle Saar described and Saar noted that this would further complicate areas such as claims, where well-established supply networks and other facilities would not be sufficient.