The Effects Of The Pandemic On The Auto Insurance Industry

​Vehicle activity has decreased because of several country-wide lockdowns caused by the coronavirus. The sharp decline in car trips has put a strain on auto insurance worldwide, but is the impact that significant? Let’s have a look.

The Pandemic Highlights the Importance of Usage-Based Insurance (UBI)
The media is putting an issue back into the forefront because of the pandemic changes: how insurance providers will ensure that they have equal rates to their clients.

People no longer travel the exact kilometers due to quarantine. Drivers now drive recklessly as there are fewer cars on the road. How does the level of danger reflect consumer premiums? The following factors decide the customer’s policy plan under usage-based insurance:

• Pay As You Drive (PAYD) - how much they use their car
• Pay How You Drive (PHYD) - the customer’s driving behavior.

Covid-19’s Effect on Insurance Companies
Soon, insurance firms should decide how to estimate their consumers’ habits. People have choices at hand after the coronavirus has passed, including restricting their time for travel and leisure. As time passes, it will get more challenging to predict what will happen. As a result, insurers should continue designing post-pandemic hybrid insurances.

Determination of Claims in the Context of Social Distancing
Say resolutions are increasingly reliant on new technology such as photo estimation methods resulting from social distancing. The images have little insight and struggle to catch all aspects of a dynamic situation that leads to a collision. Advanced smartphone telematics systems track crashes in real-time and generate a comprehensive report by processing contexts and motion sensor data.

How Can Insurers Deal with Post-Pandemic Risks?
These three advances would ensure the precision of mobile-based UBI (PHYD and PAYD) measurements:

Classification of Transportation Modes
With the motion sensor data of their devices, transport mode recognition will instantly identify when someone is moving by car.

Detection of Passengers and Drivers
After identifying a road ride, insurance agencies must determine if the client is a driver or a passenger. Fortunately, mobile-based technology for passenger/driver identification can differentiate thanks to sophisticated machine learning and AI.

Insights into Driving Behavior
Scores for testing the driver’s actions that are intelligent and accurate.

Conclusion
Insurance agencies could handle risk with data-driven UBI systems properly. It would also encourage customers to travel more safely in exchange for a reduced premium fee. For assured effectiveness, insurance providers must have the requisite advanced technologies in mobile telematics.

At Black and Associates Insurance, Inc., we aim to provide comprehensive insurance policies that make your life easier. We want to help you get the insurance that fits your needs. You can get more information about our products and services by calling our agency at (509) 464-0058. Get your free quote today by CLICKING HERE.