The global pandemic has, without a doubt, turned 2020 upside down for most sectors of the economy. While the overwhelming majority of news stories are focused on bad news – because let’s face it there’s a lot of bad news – there are some bright spots. One of these bright spots is the unexpected impact the global pandemic has had on the insurance industry.
While healthcare, retail, restaurants, and many other sectors are reporting significant financial losses, personal lines insurance is set to report a profitable year. According to Fitch Ratings, insurers are poised to see a profitable year in 2020 despite the economic uncertainty “as a result of the slowdown in economic activity and policyholders cutting back on their driving.”
But, at some point in the near future (hopefully), the country will return to a more normal footing and auto insurance claims will, more than likely return to their pre-pandemic levels. So, with this in mind, how can auto insurers maintain profits as we return to business-as-usual?
Financial Technology Today interviewed Greg Donaldson, Senior Analyst at Aite Group about the future of the auto insurance industry and the impact new technologies like artificial intelligence, machine learning, and telematics would have on underwriting and claims. “Telematics is a rapidly developing field that’s not only fueled by our ability to analyze and apply data through Artificial Intelligence and Machine Learning, but also because we have so many more devices able to capture and communicate data in real-time from the vehicle to the insurer,” Donaldson shared with us.
With things being a little quieter around the (home) office at the moment with the reduction in claims, it’s a great time to learn more about how this technology will bring not only a reduction in the number of claims and continuing profitability, but also the opportunity to promote safer driving. You can read the full conversation with Aite Group’s Greg Donaldson, here.