How is new technology revolutionizing the auto insurance and repair industry?

The auto insurance and repair industry is in the midst of an unprecedented transformation. Accelerated by the pandemic and the increasing complexity of vehicles, the industry has increased the adoption of technologies such as the cloud, AI and IoT to make the insurance claim and repair process seamless at various points of collision. These enabling technologies, combined with evolving consumer demands, are driving several trends that will forever change the claims and repair experience.

The impact of the increasing complexity of the vehicle

The percentage of vehicles equipped with advanced driver assistance systems (ADAS), such as automatic emergency braking, parking assistance or blind spot detection, is increasing. An estimated 10% of the one billion vehicles in use worldwide at the end of 2020 were equipped with key ADAS capabilities. As more cars have been equipped with these features over the past decade, the number of parts in vehicles has nearly doubled. Today, the average car consists of 30,000 parts, and new cars contain more than 1,000 semiconductor computer chips used for everything from interior lighting, engine cooling and battery management to tire pressure control, seat controls and more. Looking ahead, more advanced technologies such as artificial intelligence, cameras and sensors in vehicles will increase, making insuring and repairing these vehicles increasingly difficult and expensive.

New skill sets, technical training and tools will be needed to reduce repair times and resolve claims

Beyond safety systems, electric vehicles (EVs) are driving changes across the industry. In 2021, the market share of battery-powered electric vehicles almost doubled to 2.9% of all new car sales, compared to 1.6% in 2020. Electric vehicles can offer huge benefits, but are complex and expensive to maintain. These advances create both challenges and opportunities for auto insurers and repairers. New skill sets, technical training and tools will be needed to reduce repair times and resolve claims.

Mobile and artificial intelligence are redefining the customer experience

Over the past few years, technology has helped both insurers and emergency repair professionals move forward. Photo ratings, chatbots and text messaging have helped create digital customer service models where needed, human-centric and where desired.

Since the pandemic, customer expectations have changed, requiring more personalized and simplified interactions. As a result, there have been several advancements in insurance and repair technology that help create a more personalized experience for drivers.

With technology, policyholders can easily send digital photos of vehicle damage to underwriters and repairers to start the claim assessment and repair process faster than previous manual methods. And the data shows that consumers are willing to accept it. During the pandemic, the number of consumers sending photos of their damaged cars directly to repairers using the technology has nearly doubled, with more than 20% of claims records using photo estimates leading to an actual repair order. These photos are transmitted through an integrated network of connections and advanced artificial intelligence is applied. The experience is less about the mobile app and more about the network connections that work behind the scenes, allowing the consumer to control the entire process through their phone, helping to automate the process in all circumstances.

This example illustrates the big push toward connected ecosystems that consumers can expect in the automotive industry. Currently, in the US, one billion days pass each year between the time a car claim is opened and the time it is resolved. Establishing seamless connections between the tens of thousands of suppliers across the industry that must come together to resolve hundreds of multi-faceted solutions arising from a single claim is critical. This industry ecosystem encompasses auto insurers, auto insurers, auto parts suppliers, automakers, lenders, tow trucks, and accident injury medical providers.

This technology ecosystem has enabled the auto insurance and auto repair industry to harness vast amounts of data. Data from the vehicles themselves, digital images of the vehicles and historical claims and repair data can combine to make more accurate decisions, increase processing times and improve the overall policyholder experience. The digitization of this industry is still in its early stages, although innovation is constantly advancing.

The adoption of telematics will facilitate digitization

Telematics has been a new technology in the automotive industry for decades, but its adoption is growing. This is largely due to regulation, consumer advocacy groups working to shift reliance on credit scores to insurance policy prices, and the increasing complexity of vehicles, which drives up the cost of insurance rates and vehicle repairs. Telematics data can be applied to various usage-based insurance offerings, such as pay-as-you-go, and can be built into insurers’ new business models that are more policyholder-centric and behavior-driven.

How does it work? Telematics data collected directly from the vehicle can instantly detect an accident, trigger an emergency medical call if needed, and start the claims process with the insurance company, and in turn help repairers begin repair plans and even order parts. Telematics data shared between connected suppliers accelerates communication between all parties involved, ultimately reducing repair cycle times and increasing customer satisfaction.

Steps to a fully automated future

The automotive industry is undergoing a significant transition. Over time, consumers, insurers and repair professionals can expect this technology to continue to inform and accelerate new decision-making, freeing professionals to focus on providing a thorough, personalized claims and repair experience. With so much modern technology at our fingertips, the potential for exceptional customer service is exponential.

About the author: Jason Verlaine is Vice President of Product Marketing at CCC Intelligent Solutions Inc.