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How does AI relate to Insurance? More than you may think.

Jason RogersJason Rogers

Artificial intelligence, or “A.I.,” has already begun to transform things that were familiar to us into things that are much smarter, faster, and better. We choose movies, compose text messages, discover new music, and get driving directions all with the help of A.I. But how can artificial intelligence improve insurance?

A.I. works essentially like your brain does. It takes big piles of data and studies it for rules, tendencies, or structures to make sense of the information. Just like you do. But the key difference is, A.I. is able to see patterns in quantities of data far, far too large for a human brain to quickly make sense of.

The result? We are able to better understand our world and how it works. We can make smarter, more accurately informed decisions about it. Hence, even long-established processes are primed to be changed for the better thanks to artificial intelligence.

And perhaps no industry is more ready for an A.I. makeover than auto insurance.

Insurance, the Old Way.

Nearly 98% of insurance executives believe artificial intelligence will “revolutionize the way insurers gain information from their customers,” according to Deloitte. Over 50% predict the biggest benefit will be the ability to “leverage better data for improved insights into the customers.”

The reasons are fairly obvious. Consider how insurance companies gather information about you now. You likely visited their website, answered a few rudimentary questions. How old is your car? How much do you drive on the highway? Where do you live? Poof! – you were done. The insurance company hands over a standard  set of premiums and coverage options their underwriters created for drivers “similar” to you.

Forget judging a book by its cover. Without A.I., insurers judge books by the covers of other similar books. And as a customer, you’re left paying too much for coverage you don’t need. Or you’re ruled ineligible for coverage you do need.

But fortunately, artificial intelligence provides the insurance industry with a better way forward.

How Can Artificial Intelligence Improve Insurance? More Data.

 

According to Forbes, “telematics, or wireless communication of data back to an organization, is expected to be a huge area of growth for insurance companies.”

Telematics tells a fuller, smarter, clearer story about a customer’s driving habits. The technology gathers on-board information from the vehicle about everything from acceleration and braking inputs, to average velocity and direction, to route preferences. This is data, a lot if it. And when combined with A.I., the results are amazing.

When telematics combine with the processing might of artificial intelligence, powerful context about things like GPS patterns, historical road and traffic conditions, high-danger and accident-prone intersections, and even the effects of adverse weather conditions, means insurance companies can get a real, complete picture of exactly what type of driver you really are. Insurance technology start-up Lemonade uses bots and behavioral A.I. to automatically pay claims. And Cape Analytics applies machine learning to better underwrite properties.

With more data, A.I. becomes exponentially smarter. While Progressive Insurance took two decades to gather 15 billion miles of driver data, Zendrive gathered five times that amount – 75 billion miles – in just over a year. Furthermore, we continue to gather 9 billion miles of data each month. Hence, we have more data than everyone else combined, and we’re gathering it faster than anyone else.

Consequently, our mountains of data and machine learning algorithms give us an edge. They allow Zendrive to measure and analyze risky driving faster and more accurately than anyone. The world’s leading actuarial firm, Milliman, studied our data and concluded that it can predict collisions with up to six-times more accuracy than the insurance industry’s standard methods. As a result, Zendrive can use our data and analytics to improve driving and prevent crashes, saving lives and money. 

Conclusion

Consequently, the results are fewer claims for the insurance companies, and more fair, affordable rates for safe drivers like you.

So how can artificial intelligence improve insurance? This is how.

Artificial intelligence is here. It’s finally ready to fix insurance for the better. And Zendrive has the data to make it possible, now and for the future.