We are witnessing an exciting time in the automotive industry.
As innovation reaches new heights with connected and autonomous vehicles, the auto insurance industry is also experiencing its own evolution, using technology to improve the way road accidents and damages are handled, making saving people time and money and improving the often stressful experiences of accident management.
Transformation is badly needed in the insurance industry.
In addition to poor customer experiences during claims, some $25 billion goes unaccounted for each year due to adjuster fees, fraud, delays at repair shops and more. Innovation can change that – and it is already starting to do so.
Insurers – as some auto companies are now doing – need to think of themselves as tech companies, embracing more AI and data, and smoother customer experiences. This is particularly important because insurers will likely have an even closer relationship with automakers once cars can drive autonomously, in which case the automaker will assume liability in the event of an accident.
These innovations can save time and money while improving transparency, accuracy and efficiency, all of which are important for improving the customer experience.
Among the technologies that can offer the most impact, and their use in insurance growth, are AI and computer vision. Cellphone cameras can scan cars after crashes, replacing adjusters in assessing collision damage, making the process faster and more objective.
The next step, which is now emerging, is to use AI and computer vision to automatically generate not only damage records, but also estimates of the cost of repairing that damage.
It works by having an extensive parts and price database where estimates can be generated when a photo of the damage is uploaded. This puts the power in the hands of the driver or vehicle owner and takes it away from repair shops that have relied for decades on the mentality that “if the insurance company pays for it, we can charge as much as we want” – resulting in inflated costs for all parties involved.
If consumers can possibly do this whole process themselves — not just recording the damage with their phone’s cameras, but uploading it to their insurance company’s platform and getting an instant estimate of the cost of the repair — it would save insurance companies time and money, resulting in lower premiums while empowering the consumer in ways we haven’t yet seen.
Eventually, as cars become more connected and software-based with more sensors, repair costs could be automatically generated by the car’s operating system communicating with a digital insurance platform at the time. of the car accident. Although not yet available, the technology is rapidly moving in this direction.
Telematics, which uses GPS devices to track a car’s location, distances traveled and other factors such as speed, has already led to individual policy pricing. Drivers who adopt safer habits can get lower prices on insurance coverage or, under some plans, simply pay for insurance coverage when their car is in use and not when it’s in the car. driveway.
Other data, most of which is currently ignored in roadside cameras and sensors, in-vehicle sensors and other IoT devices, as well as texts such as accident reports and past claims, promise to add even more. information that insurance companies can use.
By eventually structuring this data into a usable form that can be analyzed, AI will be even more powerful in determining risk profiles and helping to define more accurate and personalized policy pricing.
Privacy is also important, and insurers will need to ensure they have policies that protect the privacy of their customers who provide them with an influx of data. In addition to adhering to privacy policies, like GDPR (General Data Protection Regulation), insurers will need to offer perks, like premium discounts or coupons, to those who share their data.
Now is the time for insurance companies to leverage the growing capabilities of AI and data to prioritize customer experience.