Auto Insurance in a Post-Pandemic World

Auto Insurance in a post-pandemic world

( 3 mins read )

Trends in auto insurance

Auto Insurance in a post-pandemic world is a picture that’s still developing. As is the case for virtually all industries, the auto insurance industry also underwent dynamic shifts. While the landscape is still shaky, two major trends have come forth.

Adapting to remote operations

Like virtually every industry, the auto insurance industry also threatened to take a dive. There was an uncomfortable adjustment period to those carriers who were still relying on manual vehicle damage inspection to settle claims. Moreover, the number of claims they were settling itself was reducing, because there were a smaller number of people out and about in their vehicles.

Additionally, a lot of insurance service providers were forced to make their operations remote, a style of working that may not suit this industry. But it was not just their own operations going remote that was causing trouble. They also had to take into account that their customers were also engaged in a WFH lifestyle. This prodded people to rethink their vehicle insurance coverage, their premiums, and the very need to continue with their insurance provider.

Change in pricing

This in turn led insurance carriers to up their premium coverage in the post-pandemic scenario. This is because the parallel repairs and replacements industries were also inflating their prices. If carriers maintained their prices, they faced significantly lower margins, a loss that could cripple them.

According to a study, personal auto direct premiums grew by around 3.1% in 2021 and are projected to climb higher up to 5.4% in 2022. On the other hand, loss and loss adjustment ratios will touch a  75.5% and 76% growth respectively in the coming year.

Factors that will contribute to more changes in post-pandemic auto insurance

Higher number of people back on the road

We are all collectively feeling freed of unpleasant restrictions that were forcefully imposed on us for months on end. The natural tendency is to break out and make up for lost time.

There are surges of people back on the road, sudden upticks in people renting RVs and going on family vacations. People rushing once again to their jobs, to meetings, to the go shopping. Additionally, people are still hesitating to use public transport, and so prefer to drive their own automobiles.

In short, there are suddenly more vehicles on the road after ages. This has a high likelihood of causing more accidents.

Insurance carriers may find their hands full with pending claims.

Carriers will continue to hike up their prices for recovery

This is a trend that will not vary too much in the near future. At least until insurance providers get out of survival mode and thrive again. In the long-term future, prices will drop again. But right now, it is critical for carriers to bounce back first so they can sustain the post-pandemic landscape.

Insurance policies will change

Currently, some insurers have insurance policies that are too rigid. However, the pandemic restrictions are not relaxing uniformly. In some places, only the essential workers are allowed to resume onsite work.

But insurance policies are not tolerant of these changes. Often, insurers will determine a claim settlement with behaviour-based factors like age, priors, occupation etc. The changing auto insurance conditions are not in favour of this type of claim assessment.

Also, while some insurers introduce a pay as you drive, per-mile costing, others still have fixed insurance packages that won’t budge even if the customer has hardly driven anywhere.

All this will change. Some legal procedures have already been set in motion to cause this change. Soon, carriers and insurance providers will have to change the way they charge their premiums and settle claims.

Dealing with the post-pandemic landscape for auto insurance

As an insurance carrier, you will first and foremost need to work towards slashing your costs so you can retain customers. To do that, you will need to rely on tools and technology that will lower your costs of settling vehicle claims.

Next, insurance investigators desperately need to automate their damage detection and assessment processes so that they can sustain remote operations. But the technology you adopt needs to have striking accuracy so your customers keep their trust in the telematics provided by the tool.

Claim Genius has AI technology in its arsenal that can help you not only coast through the post-pandemic auto insurance scenario, but dominate it. With automated AI vehicle damage detection powered by photographic and video inputs of accident vehicles, we lower your claims cost by 50%.

Also, our image analysis technology provides a never-seen-before accuracy in automated claim settlement that will help you regain customer trust and also get back to them in almost no time.

Our solutions are deployed as mobile-based apps, which our customers use to make their jobs easier.

If you’d like to know more about how we can help you, drop us a line.

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