Unveiling the tech revolution: Embracing the digital transformation of insurance

For years, calculating vehicle insurance has relied on a traditional formula considering factors like parking location (accumulation), claims and driving history, and vehicle type. This formula has led to an average annual expense of $2,323 for consumer car insurance in Australia. However, a new factor has emerged in the calculation of your fleet insurance premiums: artificial intelligence and telematics.

As of March 2023, over 70 per cent of Australian businesses have integrated artificial intelligence into their digital framework, aiming to benefit both themselves and their clients. Insurance providers have harnessed this technology to revolutionise the insurance industry.

By leveraging AI and telematics, insurance companies have streamlined the claims process, customised policies based on driving behaviour, and utilised a behaviour-based formula to assess clients’ crash probability of their driving history.

Luke Kelly (pictured), Director at underwriting agency Fuse Fleet said, “Digital change in insurance is reshaping the landscape, blending data, algorithms, and connectivity to revolutionise protection. To stay relevant, insurers must embrace this wave, leveraging technology to enhance customer experiences, deliver personalised coverage, and build a future where resilience conquers risk.”

Here are a few ways of how the Insurance Industry is transforming digitally:

Data is Driving Fairer Premiums 

With the integration of artificial intelligence and telematics, insurance providers now have access to vast amounts of real-time data about fleet vehicles. This data includes information about driving behaviour, location, and vehicle diagnostics. Insurers can gain valuable insights into risk profiles, enabling them to tailor insurance policies based on individual fleet characteristics. This data-driven approach ensures that premiums are more accurately calculated, reflecting the actual risk associated with each fleet.

Streamlined Claim Procedure

Digital transformation has revolutionised the claims process, making it faster and more transparent. By integrating QR codes and automated processes, insurance companies can assess claims quickly and accurately. Telematics data can also provide crucial evidence in case of accidents, helping to determine fault and expedite the claims process. This streamlined approach reduces administrative burdens for both insurers and fleet managers, resulting in faster claim settlements and improved customer satisfaction.

Personalised Policies

Gone are the days of a one-size-fits-all approach to fleet insurance. The advent of AI and telematics allows insurers to offer customised policies based on the specific needs and driving behaviour of each fleet. By considering factors such as driver performance, vehicle usage patterns, and even real-time driving data, insurers can create policies that align with the risk profile of each fleet.

Behaviour-based Premiums Calculations

Traditionally, fleet insurance premiums were determined on factors such as parking location, vehicle type, and claims history. However, agencies like Fuse have introduced AI and a behaviour-based formula to link clients’ crash probability to their driving behaviour.

Fuse uses pattern profiling with artificial intelligence (AI) to make a profile out of every second of driving. This creates a DriverDNA for the whole trip, from start to finish. The technology recognises micropatterns in driver behaviour to create a unique DriverDNA for each trip and compares this against a database of over 7 billion real-life trips to determine a unique crash probability for each trip. This system rewards responsible driving behaviour, leading to reduced accidents and fairer insurance premiums.

By leveraging AI, telematics, and data-driven insights, insurance providers are revolutionising premium calculation, customising policies, streamlining claims processes, and promoting safer driving practices. This digital revolution ensures that fleet managers have access to more accurate, fair, and personalised insurance coverage, ultimately leading to improved cost savings and a safer driving environment for all.