The emergence of insurance technology affects many insurance sectors, but probably one of the most affected will be motor insurance, which is compulsory in many markets. Usage-based motor insurance and the advent of self-driving cars are some of the technologies that may affect the segment in the coming years.
Insurance Business spoke with CJ Przybyl, president and co-founder of Snapsheet, a Chicago-based startup. The firm created a mobile app that allows users to survey vehicle damage in case of accidents, acting like a virtual appraiser, linking the consumer, the insurance carrier, and the repair shop. It has partnered with over 40 insurance carriers, reducing their adjustment cycle times.
Przybyl dispelled fears that self-driving vehicles will kill off motor insurance. In fact, claim frequencies are set to rise for the next few years, as the technology is not yet mature.
“I don't believe that self-driving vehicles themselves will upend the auto insurance industry in as fast a timeframe as people believe,” he said. “Current projections are for auto claim frequency to continue to rise for the next five to eight years with the first real inflection point coming in 2025.”
Telematics, he said, is likely to be the point of contention where insurance and advanced technology meet. According to Przybyl, the wealth of data collected from motorists is of great value, and insurers and manufacturers may clash over this goldmine.
“My view is that the telematics data available in most new vehicles today will cause the most angst for carriers. Additionally, the [original equipment manufacturers] (OEMs) will soon own all of the driving patterns, driving behaviours, and customer data that could impact the carriers in terms of risk selection and pricing.
“Although, it is still not clear which OEMs want to enter that arena and if it really will have an impact as it is not clear to me if US consumers purchase auto insurance based on relationships, bundling, marketing or simply pricing. Time will tell.”
Another issue coming up is ride-sharing, pioneered by Uber and similar companies.
Przybyl said: “A shorter-term concern for carriers that we believe is having an immediate impact is ride-sharing... Ride-share shifts insurance into the commercial domain which is a whole new ballgame for personal lines carriers.”
Przybyl shared the story of Snapsheet, which began as BodyShopBids and initially focused on linking vehicle owners paying out-of-pocket and repair shops. The team behind the firm, after observing consumer behaviour for some time, realised that they needed to involve the insurance industry.
“There are more involved in a virtual claim than just the carrier and the customer. Estimators, parts vendors, and even shops are all impacted by the switch to virtual,” he said.
In the recent damage caused by Hurricane Harvey, Przybyl said that Snapsheet built an automated custom workflow to identify Harvey flood claims from normal repairable collisions in other parts of Texas in less than a day. This allowed insurers to serve their customers quicker in the face of catastrophe.
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