Great minds have accelerated progress by building on ever-evolving algorithms and systems that learn as fast (or faster) than humans. The world of insurance has been one colored by the “necessary evils” of long waits, policies for “everyone”, and demographic-reliant underwriting processes. Innovators in this space are contending for an upgrade, and new technology is helping them achieve it.
At the Intersection of Mobility and Insurance
Less than six years ago, robotics and AI specialist Rohan Malhotra was on the scene after a friend got in a bad car accident in New Delhi. The driver was taken to the hospital and Malhotra stood by to sort out the logistics of getting the car towed and coordinating with insurance. In a series of phone calls that spanned several hours standing on busy roads to get things sorted out. It hit him: it takes two minutes to get an Uber, but four and a half hours to get a car off the road and an insurance file claimed? In a digital-first world, with plenty of capable technology at our fingertips, this is absurd.
Malhotra, an alumnus of Carnegie Mellon, let this epiphany spark an effort that would grow into Roadzen. The company has since become a transformative force in the world of AI, using it to transform insurance for mobility and reimagine how to help drivers get safer and be insured, faster and cheaper.
Cars Aren’t Just Cars Anymore
Here is a useful analogy: phones used to be devices used to make calls. Now, they are sophisticated hardware equipped with sensors, software and apps we use to manage our lives and connect to the world around us. Similarly, cars have steadily shifted from being mechanical machines we drive to being equipped with sensors and software collecting real-time information to transform in-vehicle experiences such as mapping, payments, entertainment, commerce and insurance. There are three key ways that companies like Roadzen are using what cars are and how they operate to uplevel insurance operations:
1. Dynamic and Personalized Underwriting
Underwriting is antiquated: any insurance expert agrees. A lot of factors go into underwriting a vehicle for an insurance policy. Some insurance companies have started to weigh according to personal factors, such as how well someone drives or lifestyle considerations. However, most underwriting still relies on a flawed, generic, static data-based approach. For instance, if someone is under 25 years old and a college student, they will automatically pay more for insurance. Now, however, data goes way deeper than demographics.
Underwriters can view and interpret aggregates of data down to the individual level that account for driving conditions, car type, driver behavior and more. This makes policies far more fair, but new technology can go even further, activating measures that prevent issues. Using telematics, automatic alerts can go off if a driver is exhibiting risky behavior, is in an accident-prone area, appears to be drowsy or is otherwise in danger. This could not only ensure that good rates reward good drivers, but that there are categorically fewer accidents on the road.
2. Insurance Embedded Into Transactions
A point of focus for insurtech in the last 20 years has been distribution. Selling policies online has been touted as novel, but has ceased to be anything newsworthy. What is newsworthy is new means of distribution that can be embedded into any transaction using APIs. For example, when someone buys a new car online, it can come with insurance loaded; when a family takes a trip, they can automatically add on insurance. Agents can use this new technology in which a distribution engine capably handles online channels for ease of purchase and streamlined operations.
3. Proactive Claims Processes
Filing insurance claims is something no policyholder ever wants to have to do, but it’s at this moment that insurance has value. The claims process has been a loathsome one, but innovative technology is changing that narrative. This is one scenario in which video, AI and ML have been particularly effective, activating new methods for reporting claims. Using telematics, automated systems can immediately recognize when an accident has occurred. Instead of a reactive process, a proactive series of events is launched. Individuals can immediately take photos or videos of their damaged vehicle and assess it using AI, getting a real time estimate for the cost of repairs. In many cases, this shrinks the process from days or weeks to minutes.
Advanced Innovation and the Future
The future of insurance is decidedly on a new trajectory. TESLA has grown its insurance division, one that CEO Elon Musk estimates will account for a significant portion of revenue moving forward. Roadzen, similar to Tesla, is building the end-to-end infrastructure for underwriting, distribution and claims, effectively changing the way people benefit from automobile insurance.
A few components require flexibility in any system, though. One example is that not every region will allow underwriting based on behavior; it has to be related to asset value of the car. Here, technology can still be used to scan a vehicle, assess any points of damage that diminish value, and provide comps against orange or blue book value that inform policy quotes.
Another dynamic is usage based insurance, which has blossomed during COVID-19 because not as many people use their cars. When a car is sitting still, should users have to pay full price for insurance? Usage-based insurance says no, and using software or hardware telematics, new rates may be offered.
The most advanced approach to vehicle coverage now is behavior-based insurance. This accounts for every factor: users, asset value and individual driver behavior. Data follows a connected path from the car itself or from devices in a car to pinpoint the nature of the driver and accurately calculate their risk and rates.
A deciding variable for adoption will be which tech companies can make the broadest connections, and own the most steps in the process. Roadzen currently leads that race, with a dynamic platform that can process insurance from quote to claim, maximal vertical integrations, and partnerships with over 50 leading insurers and carmakers around the world.
The Best Kind of Insurance
We live in a data rich world. The best kind of insurance is the ability to be proactive, preventing accidents on the road and using all data points to build better policies for the end user. If accidents do happen, drivers should be instantaneously empowered to take photographic or videographic evidence and get the claims process in motion. From giant fleets to individual drivers, new tech in mobility insurance is lending fresh vision to what is possible, and every person on the road stands to benefit.