Auto insurance premiums can be improved by AI integration says vendor
Published: September 30, 2019
CATEGORY: Car Insurance
Auto insurance in Canada is in a very tough situation, with most provinces facing problems with soaring auto insurance premium rates. According to one vendor, artificial intelligence (AI) could help to give regulators confidence to reduce limitations on rate restrictions.
For example, in Ontario insurance companies cannot include several assessment factors under regulation, such as credit history or at-fault accidents. Artificial intelligence could help find the riskiest motorists without needing those factors.
“I understand the rationale for that, but the idea with A.I. is that we can pick the bad apple out of any group of individuals,” Gary Saarenvirta, CEO of Daisy Intelligence, said in an interview. “If we can convince the regulators that the technology can do this in a non-biased way, then maybe they would be open to relaxing some of those regulatory limitations on underwriting.”
Saarenvirta said AI can allow insurance companies to find more complex underwriting information and find risk drivers. He says the technology could allow more separated and fairer analysis of driver risk.
“It’s pretty standard things you are able to use – age, gender, geographic area, car usage, how much driving you do, previous driving history,” Saarenvirta observed.
In terms of underwriting auto insurance, a pool of people could be differentiated more easily. Currently, a pool of consumers would look similar to human eyes, but AI software could dig deeper into the data and see which drivers have more risk of an accident.