The COVID-19 pandemic may or may not be over, depending on who you ask, but its effects are likely to linger well into the future. And that includes rising car insurance premiums.
The pandemic-related shortage of new vehicles continues, and despite moderating slightly in recent months, demand for used cars remains strong — strong enough to keep used car prices significantly higher than before the pandemic. Since older models remain on the road, spare parts are also in greater demand and more expensive.
Higher car values and more expensive repair costs mean higher insurance rates – and with inflation weighing on consumers, many motorists have reduced their insurance coverage. The high-quality fully comprehensive policies for older vehicles are particularly affected, with customers opting for cheaper fully comprehensive policies.
It’s a lose-lose proposition, both for insurers who end up with less business and customers who end up with less coverage. But advanced technology, including computer vision, big data collected by sensors, and analytics based on artificial intelligence, can correct this situation. In-depth analysis of vehicle data, images and driver histories can help companies develop tailored policies. This ensures that good drivers who take care of their vehicles for years are provided with policies they can afford – and cover the issues they need to cover – at a reasonable price.
A consumer’s goal when purchasing insurance is to get the highest level of coverage and service possible for the least amount of money. With customers more willing than ever to switch providers – and complaining more often that they are overpaying – providers must make their operations as cost-effective and efficient as possible. Advanced technology can help achieve the desired outcome of better customer service at a better price, the two things that help retain and even grow the customer base.
The presentation of policy options and premium costs is the first area that advanced technology can make more efficient. With computer vision and AI, companies can more easily determine the condition of the vehicle they are asked to insure. Big data analytics are based on a vehicle’s history, images of the vehicle (taken by customers themselves with smartphones), data from internal sensors, information about how the vehicle has been and is being used, and images of the vehicle that could reveal information hidden even from its buyer. With this analysis, companies can offer their customers a fair deal and offer them the best options for purchasing the best possible coverage. The setting of premiums will be more efficient and fairer. Carriers can even use this technology to provide customized policies tailored to specific customers – giving them the coverage they need and can afford.
Even after the policy has been taken out, advanced technologies can help make claims processing more efficient. To settle a claim, insurers must assess the damage, determine how an incident has affected the vehicle’s value, and ensure they are paying the policyholder the correct amount. To achieve this faster, data collected from in-vehicle sensors, photos of the damage and information from traffic cameras, police reports and more are uploaded to AI systems. These systems analyze the data and images to determine exactly what happened and how much to pay.
AI-powered machine learning systems dig deep into databases to understand the relationship between data and images, and provide clues about the circumstances that led to an incident. This enables agents to better determine who or what caused an incident, how badly the vehicle is damaged, whether the claimed damage is actually the result of the incident that is the subject of a claim, and what reasonable compensation for the damage looks like should. This is how companies ensure customers get the coverage they need while ensuring they are not victims of insurance fraud.
Although this system will help companies write policies for new vehicles, it is perhaps even more important for policies written for used vehicles – where the likelihood of damage or other problems in a vehicle’s history is much greater. Human agents (subject to human error) conducting a visual inspection of a vehicle could easily miss details, with the company either misjudging a vehicle’s condition and undercharging or overcharging for coverage, or under/overpaying for a claim. The system can also help companies help customers who have been involved in an accident by providing them with the best coverage options available for the money they are willing to spend.
AI-based data analytics, along with advanced imagery generated by computer vision systems, can help insurers build a better relationship with their customers and deliver more accurate outcomes for everyone involved. Advanced technologies can help build a trusted relationship with customers by helping them offer coverage and set premiums that customers can afford or assess payments by incident.
With advanced technology, insurers can protect their interests while making their customers happier – a win-win situation for both sides.
Omer Perry is a product manager at Ravin AI. She can be contacted at [email protected].
All content © Copyright 2022 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the express written permission of InsuranceNewsNet.com.