Cutting-edge technology always finds new ways to make our lives easier and elevate various business branches. Of course, some industries are inherently more susceptible to this development than others. Just take a look at the automotive industry that is practically built around technological breakthroughs.
But what about related sectors like car insurance that don’t seem so closely bound to the world of tech? Digital development seems poised on taking down the dams and moving the mountains across the entire business world, car insurance included. Let’s take a look at a couple of ways this massive technological overhaul will start taking place in 2021.
Machine Learning Streamlining Data-Processing
If you are unfamiliar with the term, machine learning is the use of artificial intelligence (AI) to allow business systems to access data, learn new patterns, and improve the experience without being explicitly programmed to do so.
This ability sounds tailored-made for car insurance companies where, for instance, AI can access the pool of data, compare quotes of the insurers and devise the most affordable plan for the customer. Car insurance is, overall, a very data-rich branch. This makes a perfect playing ground for advanced ML systems.
Greater Reliance on Big Data
Of course, this introduction of machine learning won’t be used only as a novel way of coming up with customized insurance plans. The car insurance industry has to deal with the ever-increasing volume of data with each passing day to stay relevant, and machine learning is the only way these pools of data can be processed.
What kind of new factors are we talking about? What about how nanotechnology influences car performance? Or the insurance policies related to self-driving vehicles. The number of these tech-related conundrums is only going to grow as time goes by.
The Rise of Telematics Devices
The overall business goal of the car insurance industry is to keep the coverage at a bare minimum. Translated to a real-life scenario, that would mean fewer traffic accidents and lost lives. So, it’s really a win-win situation for all parties involved.
This is why an increasing number of insurance companies are using telematics apps to encourage their clients with comprehensive insurance to drive more responsibly. These apps monitor driving speed, driving style, and other important safety factors that, if met, unlock various premium discounts for the people behind the wheel.
Usage-Based Insurance Takes Center Stage
Using telematics devices to reward customers for responsible driving, however, is only a spearhead of a process that can forever change the very core of the insurance industry. Namely, the data we get through the telematics apps will only continue to grow in the following years.
The AI tech we have mentioned in the previous sections will be able to completely model the insurance policies around the driving behavior and the vehicle. This could potentially forever put to rest traditional universal policies to rest and set usage-based insurance (UBI) center-stage.
Completely Personalized Customer Service
This development isn’t strictly related to car insurance or even other essential insurance sectors people need to protect their small business or simply go on with their lives.
All customers of all industries have become very tech-savvy and rely on the businesses to collect data about them across various channels and use this wealth of information to create a tailored customer experience.
Furthermore, the communication with the customers will continue to move from traditional channels like SMS, email, and even social media, and more and more fall into the yard of the AI chatbots.
Blockchain Technology Becomes an Integral Part of the Industry
Like all other industries that are heavily leaning into the virtual backyard, car insurance is placing large chunks of valuable data out there open for poaching. This creates a very high-security risk that has to be addressed one way or another.
One of the popular solutions for this issue comes in the form of blockchain. Although the understanding of blockchain technology is still murky, this decentralized ledger represents a safe, fast, trustworthy, and incorruptible platform for digital transactions, which is exactly what a good doctor prescribes in the situations like these.
We hope these six mentions gave you some insight into all the changes that are currently taking place in the sector of car insurance under the guidance (and pressure) of the ongoing technological trends.
Although not as heavily influenced by tech breakthroughs like the car industry, the car insurance of 2021 exists in a world that is rapidly evolving and making significant steps into the digital realm. The insurance companies that realize this first will inevitably lead the pack in the future.
About the author:
Mike Johnston is an avid blogging enthusiast and experienced freelance writer. He’s a regular contributor to numerous online publications, where he writes about business, finance, technology, and management.