The auto insurance industry is constantly evolving, shaped by a multitude of factors, from changing consumer behaviors to disruptive technological advances. In the decades to come, it will be crucial for key players in the auto insurance claims sector to understand upcoming trends, adapt to new forms of mobility, and provide personalized protections and services instantly and at scale.
In this article, we will explore the forthcoming challenges and how artificial intelligence (AI) is revolutionizing claims management and vehicle inspection. And how integrated API vehicle inspection is key too.
Claims Managers and Decision-Makers in the Driver's Seat
Claims managers and decision-makers in the auto insurance industry are responsible for decision-making, relying on their expertise and knowledge of the market. Their role involves assessing risks, determining premiums, and ensuring efficient claims management. To remain competitive in this decade, they must not only comprehend the changing needs of their clients but also leverage technology to enhance their operations.
According to Laurent Charon, Director of Innovation & Digital Transformation at AG2R LA MONDIALE, "AI is not an endpoint but a means — among other digital technologies — that they use [...] to:
- Get closer to the clients, who, in a digital world, have higher expectations for transparency, autonomy/immediacy, personalization, and anticipation.
- Improve efficiency for their employees, to better satisfy their clients, and also to address the burden of new regulatory constraints."
New Mobility Trends
Urban mobility is evolving rapidly. Electric vehicles, autonomous vehicles, and vehicle-sharing services are transforming the automotive landscape. Insurers must adapt to cover these new forms of mobility while assessing associated risks.
According to the Director of Innovation at a major insurance group interviewed by Tchek in their national survey conducted in January 2023, "If we want the sharing economy to flourish, we must consider the strong link between the deployment of this risky economy and how we can be there to mitigate risks for those who choose to participate. Many users hesitate to lend their vehicles when they don't use them daily, all because there is a real lack of accountability for the person borrowing the vehicle. If we want our clients to have confidence in the second-hand market, as insurers, we must be capable of offering them the same service as when we insure new vehicles."
AI can also revolutionize the assessment of a vehicle's overall condition before granting insurance. According to a director interviewed during the national survey conducted by Tchek in 2023, "Having photos at the time of subscription allows us to adjust the insurance premium price to the residual value of the vehicle. This enables us to offer preferential RP rates since we no longer insure at the Argus price. We pay out less in case of a claim, so it's a win-win situation."
Thus, by analyzing high-resolution images, vehicle data, and even maintenance information, AI can identify signs of deterioration, pre-existing damage, or undisclosed modifications at the time of subscription to protect the insurer from any fraudulent insurance changes. This meticulous assessment also enables insurers to tailor the insurance policy based on the actual risk or define the vehicle's residual value more precisely, while bolstering customer trust and engagement.
AI as a Collaborative Intelligence?
Traditionally, assessing body damage involved human experts. However, AI is changing the landscape and API for car damage detection too. For some claims, AI-based automated body inspection systems can now evaluate damages swiftly and accurately by analyzing millions of images and data. This not only expedites the claims process but also reduces operational costs and the risk of errors.
According to a study by Accenture in its article "Why AI in Insurance Claims and Underwriting", 85% of claims managers assert that AI in underwriting can bring value.
According to a 2022 study by Accenture, up to $170 billion in contracts could be at risk over the next 5 years due to clients expressing dissatisfaction with their insurers.
In this context of the race to retain clients for some and acquire them for others, AI is gradually emerging as a transformative technology and an essential differentiator when used in tandem with humans.
In conclusion, auto insurance is marked by exciting challenges, emerging mobility trends, and the ascent of artificial intelligence. Insurance groups are urged to harness these innovations to better serve their clients and anticipate fraud. Consumer psychology remains at the core of these developments as it influences how technologies are embraced and perceived. The future of auto insurance promises to be exciting, innovative, and customer-centric.