The rapid advancement of technology continues to significantly impact all industries and sectors, and auto insurance is no exception. Starting with the ease of accessing, evaluating and purchasing the right insurance policy from a number of options available, to ongoing support and help during the tenure of the policy, the experience for the insured can be greatly improved. Similarly, for the insurer, the internet and social media have transformed the way they reach, fulfil and engage with their target segments.
As internet adoption continues to rise in the country, it has become vital for insurers to embrace technology and provide enhanced services in the auto insurance industry. It is now possible for an insurer to provide faster, better, cheaper services, with multiple policy options, in a fully digital environment. Not only is it available to the customer at the time of their choosing, it increases choice and economic benefit by reducing the cost of service. For the insured, the entire experience of looking up options, evaluating need fit for their purpose, and finally buying a policy is now possible with just a few clicks, from the comfort of their own screens, whether at home or on the move. The limitations of time and space have significantly reduced, if not fully overcome.
With technological advancements, highly-customized insurance policies, tailored to unique profiles, are on the anvil. They help predict risks more accurately and offer the true risk price to customers. Here are some technologies that will further improve user experience and enhance on road safety:
Telematics enables the capture of data related to individual driving habits and patterns, and draw up a risk profile of the driver. This is a critical input for designing a custom auto insurance policy with it’s unique premium. Auto owners only pay the premium aligned to their driving profile, and can avoid paying for coverage based on one-size-fits-all system. By monitoring the vitals of the vehicle, technology can also prompt the owner to take specific actions, such as when a vehicle is due for service, or change of tyres. Real time notifications and nudges could be provided when customer is speeding or is approaching an accident prone zone. Besides having the potential to reward good behaviour, this also enables prevention of accidents and enables collection of data to identify risk zones for traffic policy related changes (e.g. changing speed limit of certain zones). Other applications such as navigation, availing roadside assistance, calling emergency services, using infotainment systems and others are add-ons.
Advanced anti-theft devices can vastly enhance the protection of a car against theft. A customer installing any of the various types of these devices such as Electronic Immobilizer, Alarms, Steering Wheel Lock, Keyless Lock Device, and others, assures the insurer that the customer has taken adequate preventive measures against theft of their car. Installing this kind of device in a car could help in decreasing the amount of premium that the customer pays for purchasing an auto insurance policy.
Similarly, features such as Electronic Stability Control (ESC) help in reducing accidents mainly due to tipping or rolling over of vehicles. ESC system is connected to the brakes of a vehicle, and detects abrupt pressure on the brake pads, over or understeering, and loss of necessary traction. The installation of such control and safety devices can bring down the cost of premium for the auto insurance policy to a great extent.
Technological progress will continue to pave the way for insurance products to be designed smartly, offered seamlessly, and serviced efficiently – bringing economies for both the insurer and the insured. The engagement model of the insurer will move beyond just purchase and claims. The insurers would also play a role in prevention of accidents both by prompting and rewarding good behavior. Many countries are already on this path and this is genuinely good for all stakeholders – customers, insurers and regulators / government.
Also, not mentioning the opportunities provided by social media platforms would be unfair. The fantastic tools for customer engagement, which increase product awareness and brand advocacy, are a potent communication platform to provide seamless customer support for queries and complaints. Because of the significant public impact of social media, it has made insurers more accountable and responsible to deliver on their promise of providing an insurance cover.
(By Varun Dua, Founder & CEO of ACKO)