There’s no denying that automation is a long-term goal for many industries. To automate a business is to transform it for the better, and there are so many different ways to achieve such a goal, particularly with AI (artificial intelligence). Even startup owners are looking toward automation sooner rather than later, as automation can help businesses scale without growing pains.
That said, what about the world of insurance? While automation affects every aspect of the business sector, it’s understandable to be confused about how it might impact the insurance space.
The impact of telematics and automation on auto insurance
The best type of insurance policy is the one where you have control over your prices. For example, a consumer will always go for a flexible insurance policy where they have control over how much they pay. It’s called usage-based insurance (UBI), or behavior-based insurance. Telematics combines telecommunications and informatics, combining the advantages of both fields to help develop the most effective insurance policies for consumers. With UBI, you can get the help of an insurance rating engine to aid with insurance pricing options.
The best example has to do with auto insurance offering usage or behavior-based policies. Imagine if you can control the price of insurance based on how well you drive. If you’re a decent driver, you get to pull the costs down as you pay based on best-practice methods. On the other hand, if you aren’t careful, you could end up paying more.
How does such a thing help insurance companies and consumers?
For insurance companies, the benefits are relatively straightforward. With the help of UBI, people are much more likely to trust the insurer. For companies that use UBI, it’s a great way to reduce costs for fleets and figure out how best to improve driver performance.
For the customers, it improves their experience in a variety of ways. It encourages best-practice methods when driving and results in lower fuel consumption. The better you operate your vehicle, the more optimal the experience.
It’s a form of automation, as it allows businesses to control insurance pricing based on behavior more easily. It uses machine learning and AI to give you the data you need to make tweaks and improvements.
A brighter future for insurance
There’s no denying that people aren’t too enthusiastic about insurance policies, whether for a business or an individual. Automation through telematics is getting people talking, as it’s an innovative and creative way to make things easier for insurers and the insured. Not only does it save everyone money, but it also makes the road a better place as it encourages best-practice methods for driving vehicles.
Automation impacts every industry differently
Automation is undoubtedly the wave of the future, and most businesses have long-term goals with automation. The insurance space might not seem like the most straightforward industry for automation, but it benefits all the same.
Auto insurance companies are more popular than ever with telematics and usage-based insurance through AI. It’s night and day compared to other types of insurance that don’t take advantage of automation.