Usually, technology is associated with production lines in factories. You think about robots building cars, not computers servicing customers. But the latest advancements are all about computers, data collection and processing, artificial intelligence and connectivity with the Internet of Things. That is where the dreams are being built like driverless vehicles.
The industry has transformed itself from a labor heavy to tech heavy in the last twenty years. Laborious telephone lines have been replaced by always available websites. They have been constantly reducing their workforce and they can still shed a little more to reduce costs because not only are premiums high but also, they are getting higher every day.
External Costs Wipe Out Internal Savings
Lately there have been a couple of developments that show the urgency in finding solutions to be able offer cheaper vehicle insurance prices. All those hard work and advancements have been negated in just several months. One of those problems is the increasing costs in auto parts due to supply bottlenecks. Not only do companies have to face expensive material but also, overall repair costs went up.
Then, second hand car prices tied their hands pretty tight. They increased around 40%, which prevents companies from writing older vehicles easily instead of repairing them. So, they are between a hard place and a rock. If it continues at this speed, they will have to make drastic decisions like increasing rates 10% for this year and anticipating the same and adding another 10% for the next.
Cost Reducing Technologies in Auto Insurance
Fast and clear computers and cloud storage is at the forefront of the changes in the industry. They allow large data not only to be processed but also made meaningful. The best part of it is that machine learning increases hopes that once the necessary investments made and infrastructure put in place it will keep giving, as it will have the capabilities to improve itself.
The most visible use of the Internet is the car insurance websites that are on the frontline of customer services these days. Motorists are very familiar dealing with the providers online. The latest study results show that drivers are comfortable and happier to reach their insurers through digital means rather than agents.
The lesser-known solutions are in the background in things like claim handling and processing. Another problem vehicle insurance companies are facing is the increased number of claims as well as higher cost of each one. That is why one of the first areas of improvement in most CEOs’ minds is the claim department. And it is getting more urgent by the day.
They started with handling data faster. The point they arrived at now is handling the whole process from submitting a claim right down to paying the policyholder. This seems to be the only way to keep car insurance prices in control. There is no time for checking and double checking and investigating every little thing. It is often cheaper to just send the payment, especially in smaller claims. They aren’t worth the time to dwell about.
Use of Predictive Technologies
There are many other innovative technological solutions like monitoring devices to smart programs which are designed to predict everything in order to calculate premiums much more accurately. More to the point, based the premiums on the future expectations, rather than looking back to past history which doesn’t tell as much about the expectations.
This is a lesser-known point but this switch is one of the most promising solutions to reduce automobile insurance rates. Anyone can have a bad day and have an accident once in a blue moon. In the past that one mistake haunted motorists for years. However, companies look at things like credit score, education and employment today. All those points can draw a better picture especially for a good driver and allow him/her to get better deals.