Across the insurance spectrum – from underwriting to claims – and across the consumer base, interest in digital tools, usage-based policies and other technological innovations are gaining attention. With the potential to improve underwriting, in turn, providing drivers with more accurate rates and improvements to the claims process, this interest is not without good cause.
As seen across industries during the pandemic, digital adoption trends have accelerated at an ever-increasing rate, and insurance is no different. As with most business decisions, these movements are driven largely by consumer demand.
Part of the push comes from the growing willingness of policyholders to share personal data for better rates, according to CCC Information Services, Inc.crash course report. The study found that 54% of drivers are now comfortable sharing information on kilometers traveled for pricing, up from 41% in 2019. In addition, almost 60% said they were in the process. comfortable sharing distracted driving details, while nearly half would reveal speed and location data.
Part of this activity is propelled by the fact that many have driven fewer miles in the past year due to the pandemic.
In fact, a significant portion of drivers are already using these tools as 56% have submitted a claim online and 51% have used new technology to track the claims process.
In addition, more than three-quarters of consumers say they have confidence in auto complaints and repairs fully managed by artificial intelligence (AI), according to a survey by Solera.
Highlighting the importance of technology in the future of personal auto claims, two-thirds of survey respondents said they would switch insurers to access faster digital experiences. On top of that, 73% said they would choose an insurer that leverages AI to process claims faster.
According to Mike Greene, CEO and co-founder of the Smart Chat Platform, faster, easier communications that use AI-enabled texting can also lead to more delighted policyholders. Hi Marley. âAlmost 40% of people plan to change insurer after a loss. Communicating regularly with policyholders makes them more likely to stay put and tell a friend about their experiences. “
Strong communication chains can also lead to shorter claim cycle times, helping to lower costs, Greene said, explaining: Tracking down faster. It also means less time to think about hiring a lawyer if someone doesn’t respond on time.
A combination of more willing consumers and the accelerated pace of digital adoption during the pandemic is poised to energize the North American telematics market, which is expected to grow by nearly 30%, made up of each year by ‘by 2024, according to ResearchandMarkets.com.
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In addition to meeting customer demands, data from telematics devices can improve risk analysis and the complaints process, according to Andy Yohn, product manager for Duck Creek Technologies. New data points can be used, for example, in crash recreation.
âTelematics, or ‘black box’ will point to additional data points to help understand the incident,â he said. “At some point, there might be machine learning to look at a picture and give estimates of what happened.”
Additionally, photographic and video evidence can speed up the claims process by providing precise details at critical points in the decision-making process.
âNot only can I make an estimate, but I can look at a photo or a video and see if it will be a total loss. For example, if I can see significant damage to the roof of a vehicle, I know it’s going to be totaled, âhe said. âUnderstand that it will be a total loss and how long will I be able to know that it will guide the way to decide on the claim. It’s not just about financial decisions, but workflow decisions based on the intelligence of a photo.
Echoing this, Andrew Brown-Allen, chief marketing officer and shareholder of Insurance and mobility solutions (IMS) said accelerating claims, clarifying liability disputes and fairer settlements will also be great uses for new automotive technology.
On the last point, Allen-Brown said telematics and new data sets could provide fairer rates, but the days of strictly usage-based (UBI) insurance premiums are not near.
âIt’s hard to argue that it wouldn’t be the fairest way,â he said. âUBI has been around for a while, almost two decades, but even in markets like Italy, where UBI has the highest penetration, these rates are only in the mid to high teenage range. In the US, UK and parts of Europe UBI penetration rates are still in single digits, so we have a long way to go.
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Integration of new data sets
According to John Chalfant, senior product manager for the U.S. connected cars team at LexisNexis risk management solutions. He notes that the more accessible telematics solutions become, the more they will be adopted across the industry supply chain.
âThe carriers want to see the proof, and what we are seeing from the market is that they are finding value in improving the predictability of this data,â Chalfant said. “The market understands the value of how this really improves driving behavior information, not as a proxy set, but as a true driving data set.”
Connected cars are an emerging innovation poised to open up a new wealth of driving data. However, we are not at the point where connected cars constitute the bulk of vehicles in circulation.
âObviously, connected vehicle data is increasing as more assembly lines roll out, but right now there is still a need for aftermarket devices,â he said.
Although the source is relatively new, the data collected from connected cars will be familiar to insurance professionals because it is “very standard,” Chalfant said. However, as the connected cars dataset continues to grow, the information collected will become richer.
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Barriers to adoption
Despite consumer wishes, the cost of updating existing systems has been cited by auto insurers as the most common reason new technologies have not been incorporated. Additionally, top insurers report speed to market, staff development, and platform scalability are among the most pressing challenges when trying to adopt automated AI systems, a reported Solera.
âWe have reached a point where large companies are prioritizing the adaptation and integration of cutting edge technologies to differentiate and optimize the customer experience. Those who don’t will face competitive challenges, âsaid Evan Davies, CTO of Solera, in a statement. âFinding the right mix of data and technology is the key to optimizing investments to unleash speed, intelligence and efficiency at scale. Only then can our industry get the best return on digitization through a faster and more accurate repair complaint process.
At IMS, the mantra has always been “the data by itself won’t change the results,” said Brown-Allen. âIt requires the intelligent use of this data to modify the results. “
For telematics and other technologies to really change the risk of driving, engagement needs to reach a level where behavior modification occurs, he said.
âFrom the carriers we speak with, they might be successful in getting early and light adoption of these new technologies, but to really achieve better results it takes a level of deep engagement that few people have mastered until. present, âsaid Brown-Allen. noted. âIt’s more than downloading an app and driving well for a few weeks. It’s about how they drive on day 363. It’s about having a real impact on behavior, which will impact complaints. “
To this end, IMS has researched the topic and how the proposal is worded could be critical for membership. Brown-Allen explained that if you asked 100 people if they would like an in-vehicle device that can detect a collision, offer roadside assistance, and contact their insurer, 90% would be interested. The same would not be true if asked about their interest in a device that will tell them if they are a “good or bad driver”.
âIt’s less about using than providing the service for a reason. In this case, it is that moment of truth when an insured is involved in an accident, âhe said. “It’s sort of untapped gold, but people are starting to understand.”