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The pandemic and AI have permanently changed auto insurance, and it’s only the beginning

By Shivani Govil, Chief Product Officer

COVID-19 has had far reaching impact — from how we shop, work, learn, socialize, and even how we receive medical care. While some of these highly visible everyday activities might come to mind first when we think of the long-lasting impact of the pandemic — if you dig a little deeper, you will see how the pandemic has accelerated the adoption of technology at warp speed across many industries. Fintech and Insurtech are two areas at the top of that list. 

An auto accident is an emotionally stressful experience. Previously it involved a string of tedious processes including multiple phone calls to submit an insurance claim, in-person appointments for vehicle inspection, back and forth with repair facilities to get the vehicle repaired and more. In recent years insurance carriers have been working to digitize this entire experience. AI, mobile, and telematics data combine to guide policyholders through the claims process, automatically initiating claims, helping create repair estimates from photos, scheduling repair appointments and keeping customers informed along the way. The result is a claims process that is more transparent, up to two weeks shorter than what was previously possible and designed to provide the end customer with a seamless, stress-free experience in the moments following an accident. 

These technologies are delivering convenience, but as important, they are making the claims and repair process more objective and consistent, setting in motion a new future for auto insurance. A digital future, delivering policyholders transparent access to information, while invisibly managing dataflow and insights across a vast network of businesses — automakers, insurers, tow facilities, repair facilities, lenders, rental cars, and more — to get drivers back on the road.

This modern view of claims and straight through processing is becoming today’s reality as the industry innovates to keep pace with an even more exciting tomorrow. Technologies such as 3D printing, augmented reality (AR), virtual reality (VR), blockchain, and drones are the next wave of tech innovations set to digitally transform the P&C insurance economy.  

Today’s tech is just the starting point.

Mobile apps and AI use surged during the height of the pandemic when people were steering clear from in person contact and virtual services were synonymous with customer service. The adoption of mobile photos by policyholders to report accidents to initiate an insurance claim grew significantly. In 2020, claims processed using deep-learning AI from CCC Intelligent Solutions (CCC), a technology leader powering the P&C insurance industry, increased more than 50 percent year over year. CCC has processed more than five million unique claims using digital photos and AI on behalf of insurers and tools like photo estimating, virtual inspections, heat maps, and online shop scheduling have provided insurers a digital pathway to develop a contactless claims experience to keep their customers’ lives moving forward when it mattered most. As more sophisticated AI capabilities are embedded into mobile apps, even more complex claims will benefit from this technology. 

The industry has come a long way, but there is still untapped potential.

While the auto insurance industry is amid a digital transformation, the innovations are just beginning. 3D printing technology, for example, is being explored to help speed repairs by having some parts printed right in the repair facility.  

Blockchain — the same technology made famous from the rise of bitcoin — has real world use cases in auto claims and reinforces the importance of a digitally connected ecosystem. According to CB Insights, blockchain technology enables automated real-time data collection and analysis, potentially making some types of P&C claims process up to 3x faster and 5x less costly than at present. Combating insurance fraud costs could also be improved with blockchain. CB Insights has found the average US family spends anywhere between $400 and $700 in the form of increased premiums to offset fraud in the system. In the future, every time a repair is made it might be registered on the blockchain, so the entire lifecycle of a car is logged. This could create tremendous value across the ecosystem and policyholders. Buying a used car could become a much more transparent process, creating more accuracy around underwriting insurance policies for those vehicles, and providing important insight should future repairs be needed, for example.

Augmented reality and virtual reality technologies may add value at scale. These technologies have gained relatively quick adoption in the consumer space, yet enterprise use cases have been slower to mature. This is quickly changing as the benefits — across many verticals — are becoming clear. Look at the healthcare industry. A UCLA David Geffen School of Medicine study found that VR training on the Osso VR platform improved participants’ overall surgical performance by 230 percent compared with traditional training methods. With such impressive results, it is easy to see how AR and VR can impact other industries and processes, including vehicle repairs. As vehicles become more sophisticated, including more sensors, lidar, and cameras, they are getting more and more complicated to fix and more training is needed by the professionals who repair them. 

The good news is that the auto industry is already exploring how to use AR and VR technologies, and some are already in the testing/piloting phase. In the future, expect to see insurance appraisers and repair estimators using these technologies to help with damage assessment and likely creating even more convenience for vehicle owners.  

And as we look further down the road, it is not far-fetched to imagine a reality where drones will take photos and videos of vehicle damage and accelerate the ability to process claims at scale following the seemingly increasing number of climate events — fires, hurricanes, hail, storms, and in turn the increase in policyholders needing rapid access to claims and payments.  

Bringing it all together

These emerging technologies capture and relay a massive amount of information that needs to be shared across multi-parties — automakers, insurers, collision repairers, parts suppliers, tow networks, lenders, and consumers — for decisions to be made and the process to move forward without friction. 

The underpinning of digital transformation across the P&C insurance economy will be highly connected networks that seamlessly work together to deliver an experience that meets modern consumer expectations for service while driving operational efficiency and better outcomes to providers across the chain. 

What would this seamless experience look like? Moments after an accident, the driver receives a call or text from their automaker or insurer. Leveraging advanced analytics and data streamed from vehicle telematics, an accident is detected. The driver is contacted to confirm he/she is OK, medical help is hailed or in less severe accidents a digital insurance claim can be filed on the spot. No digging through paperwork to find phone numbers or navigating an automated call center system. And, less anxiety upfront.

The driver simply captures photos of the damaged vehicle for a quick, virtual review. In the case of a repairable vehicle, the AI-generated estimate is returned to the driver’s smartphone in minutes. A digital list of nearby shops with consumer reviews helps guide the driver through choosing a repair facility. A similar digital, AI-powered process exists for drivers who may have sustained an injury. 

These steps took days or even weeks just a short time ago. Now, with the acceleration of advanced technology in the process, consumers will no longer wait weeks to know the status of their damaged vehicle.

As vehicle complexity grows, we are nearing a tipping point where AI and emerging tech is becoming necessary to have higher accuracy in claims and repairs. We are committed to helping the insurance ecosystem leverage technology to remove friction, accelerate touchless processing, and deliver a new level of satisfaction to customers across every stage of an increasingly complex journey.