The insurance industry is changing fast thanks to new ways of looking at data and new technologies driving innovation. Artificial intelligence and big data analysis are particularly important to the automobile insurance industry. New technology is impacting insurance in several key ways:
Real-Time Risk Monitoring
Telemetric data collected from mobile phone applications or ‘black box’ in-car recorders allows insurance companies to make continuously shifting risk assessments based upon driving style, road conditions, and time of day. This should, in theory, allow companies to lower the number of unfavorable claims made by customers driving poorly. This should lead to increased customer satisfaction stemming from fairer pricing.
Personalized Products and Pricing
Modern intelligent data analysis programs can quickly analyze micro and macro datasets in order to generate unique products and prices for customers based on their driving history, location, and the state of the market. In theory, this can allow companies to offer fairer deals to consumers. Companies like KBD car insurance Montreal already make use of personalized quotes generated digitally.
Claim Reduction
It is in the interest of insurance providers to prevent accidents – which invariably lead to claims. An analysis of driving standards amongst customers can help companies develop educational or intervention-based methods for reducing car crashes.
In order to successfully implement these technology-driven changes, insurance companies have to deal with three important issues. Here is a brief rundown of these pertinent points.
Data Security
Many members of the public are rightfully suspicious of constant data collection and analysis. High-profile data breaches and examples of data misuse have cast a long shadow over insurance innovations. It is absolutely crucial that insurance companies do everything in their power to reassure customers about the level of security and integrity they can bring to the table when handling sensitive personal data.
Effective Analytics
Car insurance companies are going to need to retrain and restructure in order to cope with constant risk analysis and data collection. New members of staff are going to have to be employed or contracted as consultants in order to create working environments where the use of big data and telemetry is comfortably embedded.
Likewise, the appropriate analytic and visualization software needs to be purchased or developed by insurance companies. Not every intelligent software package will be remotely useful to insurers.
Common Data Environments
Because the insurance industry is in the early stages of adopting intelligent technology, it is still in the process of creating a common data environment. A common data environment is a set of well established protocols dealing with the storage and analysis of data. Although individual companies have common data environments, the industry needs to develop such an environment across the board if it is to improve as a whole. Developing a broad common data environment in auto insurance will likely take a little bit of time. Rest assured, however, that every innovation shared is a step towards a common goal.
