UK Trend Watch: Artificial Intelligence will drive more relevant motor insurance

Scott Field, Head of Analytics and AI at Duck Creek Technologies, reports on the pioneer UK motor insurer using advanced technology to provide fairer premiums and better customer experiences for drivers Using artificial intelligence to make more personal connections with customers may sound counterintuitive at first – but the world’s most forward-thinking technology companies are achieving exactly that by harnessing AI (artificial intelligence) to create emotional connections with their customers at a massive scale. One of these forward-thinking companies is Adiona, with whom we have recently partnered to bring far greater transparency and fairness to the UK motor insurance market. The dynamic team at Adiona is looking at the motor insurance market with a fresh pair of eyes, on a mission to provide both a better customer experience and to significantly reduce the cost of policy administration for drivers. Core to this mission is looking at data differently. Instead of using[ME1]  traditional data points such as gender, age, and location, Adiona is using always-connected mobile data to collect more useful insights on an individual’s driving habits and behaviours[ME2] . This data is then processed using AI and machine learning to create individual risk scores, leading ultimately to fairer premium costs for responsible drivers. This is particularly important for safer drivers – including those on lower incomes who cannot afford to see indiscriminate year-on-year increases in their insurance premiums regardless of their claims history or safe driving behaviour.

Making insurance more relevant

All this is part of a wider trend of connecting insurance with customers on a deeper level – not just one-off touches at the point of purchase or renewal, or during the claims process. Instead, data can be used intelligently to help prevent claims occurring in the first place – and in the case of motor insurance, this has benefits to individuals and society in encouraging safer driver behaviour. By analysing individual as well as accumulated customer data, insurers can connect with wider patterns and changes in preferences and not only respond in real time but also anticipate what is coming next. AI can help spot trends before a marketing team or human data scientist can – making sense of enormous volumes of customer data across multiple channels and offering sophisticated recommendations based on past interactions. Excitingly, Adiona will initially focus on the UK motor insurance market before pursuing longer-term opportunities across global P&C insurance markets. Adiona’s mission is a refreshingly progressive approach to insurance – an approach that we at Duck Creek couldn’t wait to get behind.

A seamless AI platform

The time is right for ambition like this. Just as AI and machine learning have rapidly evolved as technologies in the last five years, so too have the platforms that power these innovative solutions – and no-code and low-code solutions provide simple interfaces that can interact seamlessly with complex AI systems. 2022 will be a year to remember for UK motor insurance and for the market in general. Technologies like AI are not only more accessible and powerful than ever before, but their transformative potential for personalised customer experiences in insurance is far more widely accepted. Telematics, AI, and machine learning are the missing links to creating a more relevant, simple, and efficient experience for customers. The bar has been raised in terms of demands for sophisticated, easy-to-access digital experiences, and those insurers that can truly see the world from their customers’ eyes. It’s not just about creating the impression of empathy and authenticity – far from it. AI and machine learning are critical tools in turning those cold, impersonal sets of data that insurers amass on a daily basis into something far more useful for them and for their customers, and indeed for society. Read the Adiona press release here.