The insurance industry is changing at a rapid pace. The introduction of InsurTech innovations have made an impact on virtually every aspect of the insurance business – from sales, customer management, claims processing and even how companies collect policyholder information. The new technology is designed to streamline processes, reduce administration expenses and open the door to new revenue opportunities. They also create benefits for customers with customized service, claims management and policy options to better meet their needs. Auto insurance will experience seismic changes in 2018 brought about, in part, by InsurTech innovations. Items such as just in time (JIT) insurance telematics, networked claims processes and even automated brokers to sell policies. To help clients, prospects and others understand the changes and how InsurTech can impact their insurance company, JLK Rosenberger has provided a summary of key tech trends in auto insurance below.
Key Auto InsurTech Trends
- Telematics – This technology allows insurance companies to gain a better understanding of a driver’s behavior. In the past, insurance companies had no idea how a specific driver was behaving when behind the wheel. Agents had to rely on past claims, DMV records and general questions to determine the level of insurance and costs for each policyholder. Using telematics, agents can create a custom policy based on actual data that meets the correct level of risk. Telematics allow companies to reduce the risk of fraudulent claims with easy access to location, time and speed data for the impacted driver. If a driver files a claim with information that is false or modified, the insurance company will be able to quickly uncover the deceit and take appropriate actions. Finally, with this information, companies will be able to attract more profitable drivers, reduce the number of claims and set pricing in line with customer risk profiles.
- Just in Time (JIT) Insurance – There are several InsurTech companies developing apps that allow a driver to purchase short-term auto insurance. More and more drivers are electing not to purchase their own vehicle and end up borrowing someone else’s vehicle. In the past, it was assumed they were covered by the owner’s insurance. This is true when it comes to the property but not the actual driver, leaving the driver with a significant amount of risk. Through JIT apps a driver can find and purchase short-term insurance online and get the necessary coverage. Cuvva is one JIT insurance company that offers a seamless, fast and effortless way to purchase short-term coverage.
- Automated Brokers – How insurance is being sold will also change. New InsurTech companies are offering automated brokers that collect some basic information about a potential policyholder and search the web for the best pricing available. This is similar in principle to the many travel sites that have become well known and heavily marketed. One company called Insurify offers visitors the opportunity to find the best coverage based on their situation and compare costs, benefits and other variables. They can even sign up for auto insurance online and quickly obtain coverage.
- Networked Claims Management – When a claim is filed, it’s important for the insurance company to quickly initiate the property repair process. In the past, the adjustor had to see the car in person, document damage and then approve the repair/payout process. Through InsurTech, commercial and private customers can accelerate the process by submitting photos and other essential information online in real time. With this information, insurance companies can more easily get estimates for repairs and make the best decision for the company and policyholder. There are several companies that offer this service to insurance companies, including SnapSheet and ClaimsDi.
This is an exciting time for auto insurance companies because of the opportunities that abound. InsurTech has opened the door not only to process improvement but also to a more profitable way to do business.