How AI Gives Auto Insurers a Competitive Edge
Updated: Jun 2
I like to think I'm a good driver.
I have been driving for over 30 years and have only had 3 minor accidents. So when I got on the highway one day and the car in front of me stopped, my heart skipped a beat.
As I accelerated on the highway at 60 miles per hour, the driver in front of me slammed on the brakes. I tried to stop in time, but it was too late. I hit the back of the car in front of me. .... Crunch!
I was not injured, but the other driver was furious that his car had been damaged. I was busy worrying about fixing my car. And I soon learned that the cost of repairing my car was more stressful than the accident itself.
That's when I became curious about the Insurance Bureau of Canada (IBC) research. They said that insurance companies in Quebec are having similar problems with body shops. " Between 2009 and 2019, the average cost of collision claims increased by 32%. Over the same period, average premiums increased only 2%."
Why collision costs are high for insurers
Quebec law allows car owners the right to choose their own repair shop after an accident. However, insurance companies have their own list of recommended repair shops. They call it the "Network of Trust. " But "trust is in short supply," says Ellie Lloyd.
Lloyd is the co-founder of Nsemble.ai, an artificial intelligence-based damage detection app. He grew up in Quebec, where he worked in his family's auto body shop. He witnessed the deterioration of relationships between garages and insurance companies.
It started when some shops raised their prices to make a profit. In response, insurance companies reduced the amount they would pay for repairs. Soon, repair shops could no longer afford it.
The situation worsened and some shops closed. Rebuilding trust improves the bottom line for both sides.
But how do we do that?
Repairing Trust Between Body Shops and Insurers.
Forward-thinking insurance companies have started using AI to benchmark collision costs. This gives them the ability to create virtual estimates. These save time, create consistency and efficiency.
Lloyd's software company provides an AI-powered damage detection app for the Canadian market. This is supported by his background in software consulting for Canadian auto insurance fraud and auto parts supply.
The Nsemble app lets insured drivers take a snapshot of their vehicle’s damage. Insurers get an accurate estimate based on benchmarked Canadian costs. They send it to the body shop repairing their customer’s vehicle, so it can be compared to the shop’s own estimate.
“Benchmarking collision costs reduces friction while increasing the acceptance rate of repair estimates,” says Lloyd. “Body shops save money from not having to reserve space for damaged vehicles. And insurance companies don’t need to send an Estimator to double-check their work.”
There’s less need for loaner vehicles too, which further lowers costs. And insurers can reallocate labor resources without the need to hire as many Estimators.
It’s a win-win for cutting costs.
Future-proof Your Insurance Company with AI.
Lloyd believes the claims settlement process will continue to evolve. He says AI can continue to add efficiency throughout the four stages of the claims process. From first notice of loss (FNOL), estimation, and repair to delivery. And Nsemble.ai intends to be part of that future.
I'll never forget the stress I experienced from my worst car accident ever. I think an AI-powered damage detection app would have given me some relief. But my insurance company doesn’t offer one. If they had, they would have saved us both some money and I would now trust them more.
Want to position your insurance company for future success with AI? Nsemble.ai is offering ground-floor partnership opportunities to forward-thinking auto insurance firms. For details, please contact firstname.lastname@example.org.