There is not one industry that remains untouched by the growth in technology. Advancement in technologies affects every industry for good.
Better technologies reduce operating costs, labor, and time; and make services available to a diverse population. The auto insurance industry is not an exception. With the extraordinary growth in technology – the insurance market is changing.
Technologies to Transform Vehicle Insurance Industry
What’s the change, and how can it benefit you? Let’s take a look at all the different ways the vehicle insurance industry is getting transformed.
1. Self-Driving Cars
Ever since the genesis of the car, from Karl Benz’s basic engine car to the massively popular Ford Model T: hundreds of things have changed about the car in over a hundred years except for one; a human always drives the car. This is changing now.
A complete paradigm shift, now cars are becoming the “driver,” letting the humans take the backseat.
From fully automated self-driving cars such as Tesla to semi-autonomous cars with technologies such as ADAS – car companies are using advancements in driving technologies to make cars safer and accidents rarer.
Technologies such as lane assist, collision prevention, and ADAS are no gimmicks. These technologies have prevented thousands of car accidents, saving lives, and expensive insurance claims for the company and repair and medical treatment bills for the people.
Thus, it is natural that car insurance companies will try to incentivize these cars. You can expect discounts and lower rates of car insurance for insuring cars with self-driving/accident prevention features.
2. Artificial Intelligence
No other word gets tossed around as much as artificial intelligence, and for the right reasons. If the industrial revolution was the most important invention of the 1700s and the combustion engine of the 1800s, then for our century, artificial intelligence sits in the same place.
Artificial intelligence is everywhere, even when you are not aware of it. From the search engine you used on the internet to the weather app that told you what the weather’s going to be like, A.I. is everywhere. And everywhere means, it includes auto insurance companies as well.
For example, auto insurance companies are using AI-driven software to calculate all the possible risks of a person getting in an accident. And the accuracy with which these programs can predict how likely a person is to be in a car accident is downright scary.
The program takes in data from different sources, such as the area where the person lives, the rate of accidents, crime, and the person’s driving records, and predicts a score.
Some insurance companies might require you to give real-time data about your driving, especially for people who opt for mileage-based auto insurance.
Then an A.I-powered program takes all the data such as driving speed, acceleration pattern, braking intensity, and frequency and predicts how likely the person is to get in a road accident.
The benefit of using A.I. This way, people can get better rates if they drive well, even after they have had a few minor hiccups in their driving record.
The insurance company, on the other hand, can now assess people better and more accurately to reduce the chances of insurance claims. So you can get the cheapest car insurance rates without too much hassle.
Not just that, but A.I. helps in speeding up insurance claims and quotations, and gives users a more personalized experience.
Imagine A.I. in auto insurance companies as a super-intelligent and efficient insurance agent who knows everything about your driving record.
3. Social Media and Metaverse
How humans interact with each other and applications are changing rapidly, and all these changes occurred just a couple of years ago.
The ever-increasing penetration of social media apps (which is becoming more of our personal life) and the rise of the metaverse will completely change how you interact with your auto insurance company.
No matter how old you are or how far away from technology you may stay, in one way or another, you are associated with social media. Facebook, Twitter, Instagram, etc., have touched the lives of almost everyone.
Now, insurance companies are using the power and the massive traffic of social media to make customer interaction and services faster, better, and more personal.
Insurance companies can create a chatbot or a digital assistant that might look like an animated person.
So instead of typing your question, getting dumb automated replies, and begging the bot to bring in a real human to help you with some issue, you can have a natural conversation with a digital insurance agent and get your issues resolved within minutes! All while scrolling Instagram or Facebook.
This not only makes it easier for customers to get their issues resolved in a faster and easier way (instead of going to the insurance company’s website and then looking for ways to contact them, or worse, visiting their offices physically).
But this method helps auto insurance companies to offer great customer service all while not increasing the cost of operation (by hiring people, and an elaborate system of customer service department).
4. Internet of Things and Predictive Analytics
The days when smartphones and laptops were connected to the internet are far gone. These days, almost every device is connected to the internet, such as your TV, fridge, microwave, doors, lights, and cars. Cars are not only connected to the internet but to neighboring cars as well.
With some protocol of connection, each car on the road can be connected and be “aware” of each other’s presence, collecting data and analyzing it.
In an accident, this data along with predictive analysis can help speed up the insurance claim process. The data can help in finding out who’s at fault for the car accident, possibilities of insurance fraud, and a lot more.
Bottom Line:
Whether you like it or not, technology is going to completely transform the auto insurance industry. The good thing is that it will favor people who drive carefully and penalize those who don’t.
