AI Digital Transformation in Auto Insurance: Steering the Future of Claims and Customer Service

Driving into the Future: How AI Transforms the Auto Insurance Game
  • April 13, 2024

In today's world, navigating the complexities of auto insurance, particularly with young drivers, showcases the crucial role of AI digital transformation in the insurance sector. From the nerve-wracking moments following an accident to the painstaking process of filing a claim, the journey with insurance companies has evolved significantly over the years.


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Reflecting on my own college mishap, where a simple rear-end collision turned into a lengthy ordeal on the phone with an insurance agent, it's clear that times have changed. Now, as a parent to tech-savvy teens, the landscape of insurance has been transformed, thanks to innovations like GPS devices and seamless app integrations. But what lies at the heart of this transformation? The answer is simple yet profound: Artificial Intelligence (AI).  

AI digital transformation for insurance companies: Lets talk about khaki-wearing Jake

Having a kid driving in my family has familiarized me with my auto insurance company. Every time something happens, and I place a call to my version of a khaki-wearing Jake, I try to remind myself that accidents happen and that I was a kid, too. But the experience I have, calling the company, filing a claim, waiting on a response; the whole experience of working with my insurance company, is significantly different than it was when I was younger. 

When I was in college, I was driving and talking on the phone when I rear-ended a car. (Don’t judge me; collectively, my generation ignored how dangerous it was.) The next 30 min looked like this: 

  1. Hang up the phone – 5 seconds 
  2. Call my parents to apologize – 55 seconds 
  3. Called my insurance company – 29 minutes. The call to the insurance company was one of the most painful experiences of the whole ordeal. I’m standing at a busy intersection, questioning if my car will still get me to work, and “Jake” wants to know where I was, what I was driving, and what I was doing. The information was important, but the experience of gathering that information caused anxiety at an anxious moment. 

Fast forward to my very expensive children. 

My current insurance company provides GPS devices for our cars that sync to each of our phones. When my child was in an accident, the GPS receiver picked it up, notified me over the app, put my child in touch with the correct authority figures, ordered a tow truck, and began the claims process with a few clicks; this was a monumentally better customer experience than what I described earlier. How did we simplify the process so much? 

 

The quick answer to this is technology, but the real workhorse behind it is AI.  

Ai digital trasnformation for auto insurance companies

We often discuss AI as a future concept, but its impact is already profound in areas like auto insurance, where it simplifies complex data into actionable insights. This is a testament to the ongoing AI digital transformation in the industry.  Take that GPS device in your car, for instance. It's basically a data goldmine. It knows how fast you were going, how fast you stopped if you braked if the airbag deployed, and so much more. Since it connects to the app on your phone, it knows where you stopped and … if you were texting your friends before you suddenly stopped.  

It's a lot of info, no doubt about it. But here's the kicker: all that data is just sitting there, twiddling its thumbs, unless someone (cue the AI) steps in to make sense of it and help us make some smart decisions. Because let's face it, without that AI magic, more people (and businesses) would be drowning in a sea of data, clueless about what to do with it all. But I would be remiss if I didn’t point out that truly impactful AI relies on strong data organization and data governance.  

 

AI is the transformative magic behind making decisions.  

Using the large amount of data provided, it can assess whether you are stopped at a light or under a car's rear bumper and then take action (with your permission, of course). It can help you make decisions when you are unable to do them yourself. 

There are many things AI can’t do; for example, math is not its strong suit, nor is it generating images with lifelike hands, but it’s getting remarkably better at handling the grunt work so we can focus on what’s important. Imagine the possibilities. You can ask questions like, "What were our sales figures last quarter?" or "Show me the top-performing products by region." With well-implemented and trained algorithms, you receive accurate and relevant answers in real-time. 

When you’re in a car accident, you should be able to focus on deep breathing and your safety, not all the data points of the ordeal. Similarly, AI can be used at work to parse through the details and summarize what’s important.  After all, isn’t that what you are trying to do when you look at a bar chart, summarizing an enormous number of data points into something that simply answers a question? 

The AI discussion covers a lot of ground. If you’re having a difficult time finding a place to start, please reach out to SME or get started with your AI journey by downloading the AI Readiness Kit.

And before I bid you adieu, here is an AI-generated music video recapping a session on “Taking the Fear Out of AI.” Great session led by SME’s CEO, Chris Moyer. It may have taken the fear out of AI, but not sure anything will take the fear out of me when it comes to have a kid driving.   

 

 

 

 

 

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