# On the road to success: technology changing motoring insurance
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2017-08-04
Category: INSURANCE
Category URL: https://financedigest.com/category/insurance
Meta Title: The Future of Insurance: How Technology is Reshaping the
Meta Description: Discover how technology is reshaping the insurance industry and the new risks and challenges it brings, from self-driving cars to connected vehicles.
URL: https://financedigest.com/on-the-road-to-success-technology-changing-motoring-insurancehtml

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_By **Paul Ridge**, Banking & Insurance Specialist,_ [_SAS UK & Ireland_](https://www.sas.com/gms/redirect.jsp?detail=GMS56847_85314)

Disruptor, innovator, challenger. These are all words associated with companies like Netflix, Airbnb and Uber. They’ve succeeded in changing established industries and business models, largely supported by technology. Smartphones and related mobile innovations have been pivotal in changing the way [consumers access services and are altering their demands](https://www.financedigest.com/global-emi-shielding-market-significantly-hit-by-lack-of-consumer-demand-scenario-post-covid-19-crisis-likely-to-remain-gloom.html "Global EMI Shielding Market Significantly Hit By Lack Of Consumer Demand; Scenario Post Covid-19 Crisis Likely To Remain Gloom") from brands for added-value.

The insurance industry is not immune to [technology’s sweeping changes](https://www.financedigest.com/how-technology-has-changed-our-lives.html "How Technology has Changed Our Lives"). As an industry, it’s always been there to cover the risks we face in our daily lives – [driving our cars](https://www.financedigest.com/rising-concerns-towards-safety-of-child-are-expected-to-drive-demand-for-baby-car-seat-market.html "Rising Concerns Towards Safety Of Child Are Expected To Drive Demand For Baby Car Seat Market") up and down the M1 or starting a business with the adequate cover. Yet we’re [seeing](https://www.financedigest.com/the-antibodies-contract-manufacturing-market-to-see-through-the-probable-sea-change-through-digitization.html "The Antibodies Contract Manufacturing Market to see through the probable sea change through digitization") those risks slowly start to change as we start to change the way we live our lives.

[Technology is evolving industries](https://www.financedigest.com/adverty-launches-industry-first-streaming-video-technology-for-in-play-ads-in-partnership-with-seenthis.html "Adverty launches industry-first streaming video technology for In-Play™ ads in partnership with SeenThis") like motoring. With the introduction of self-driving technology, we’re facing a future of fully [autonomous vehicles](https://www.financedigest.com/adoption-of-autonomous-underwater-vehicles-market-to-surge-during-the-forecast-period-owing-to-increased-consumer-demand.html "Adoption of Autonomous Underwater Vehicles Market to Surge During the Forecast Period Owing to Increased Consumer Demand"). The pace of adoption is widely debated, but for an insurer, this could mean the risks it used to cover begin to change. However, a new range of risks, not previously at the forefront of [car insurance](https://www.financedigest.com/5-tips-for-selecting-the-best-car-insurance-coverage.html "5 Tips for Selecting the Best Car Insurance Coverage"), are beginning to appear. For example, smart cars may look after drivers more than traditional [vehicles used to but will also make decisions that could increase public liability risk](https://www.financedigest.com/eu-electric-vehicles-risk-4-3-billion-euro-post-brexit-tariff-cost-auto-body.html "EU electric vehicles risk 4.3 billion euro post-Brexit tariff cost – auto body") – for example, where they lose control and cause injury or damage to a third party in the act of protecting the occupants. As [cars become](https://www.financedigest.com/analysis-when-do-electric-vehicles-become-cleaner-than-gasoline-cars.html "Analysis: When do electric vehicles become cleaner than gasoline cars?") more sophisticated, the cost of repairs will alter, with more delicate sensors and bodywork at the perimeter of the vehicle where most damage occurs. The value of insurance will change as that evolves.

We are already starting to [see this change](https://www.financedigest.com/the-sepsis-therapeutics-market-to-see-through-the-probable-sea-change-through-digitization.html "The Sepsis Therapeutics Market to see through the probable sea change through digitization") take hold. Tesla, the most successful [electric car](https://www.financedigest.com/electric-car-insurance-your-questions-answered.html "Electric car insurance: your questions answered") manufacturer in the world, is rapidly exploring self-driving vehicles. Tesla’s CEO, [Elon Musk](https://www.financedigest.com/iron-man-elon-musk-places-his-tesla-battery-bets.html "Iron man Elon Musk places his Tesla battery bets"), has been vocal in saying the insurance industry isn’t fairly recognising their drivers and the risks they present, based on the new technology they are building into their cars. Their argument to [insurance companies is that if you’re](https://www.financedigest.com/ten-things-youre-doing-that-are-invalidating-your-car-insurance.html "TEN THINGS YOU’RE DOING THAT ARE INVALIDATING YOUR CAR INSURANCE") going to price Tesla drivers based on traditional rating models then we’ll have to price them ourselves. This is going to have repercussions within the incumbent market. In the interim, [alliances are building across the industry](https://www.financedigest.com/gumgum-joins-global-alliance-for-responsible-media-garm-providing-contextual-brand-safety-and-suitability-expertise-to-industry-standardisation-efforts.html "GumGum Joins Global Alliance for Responsible Media (GARM) Providing Contextual, Brand Safety and Suitability Expertise to Industry Standardisation Efforts") – in the UK Tesla has partnered with Direct Line, meaning it can refer customers directly to the insurer for appropriate cover. Tesla and other manufacturers are now waking up to the value of the [data and real-time insight that connected cars](https://www.financedigest.com/interoperability-of-data-to-accelerate-the-car-t-cell-therapy-market.html "Interoperability of data to accelerate the Car T Cell Therapy Market") can give them. So, unless [insurers](https://www.financedigest.com/different-countries-different-insurance-cultures-how-insurers-can-adapt-their-products.html "insurers") carefully consider these partnership opportunities, they’ll get left behind.

Alongside this innovation, there are questions now being asked of the [data points and analytical techniques traditionally used to price car insurance](https://www.financedigest.com/how-data-is-revolutionising-car-insurance.html "How data is revolutionising car insurance") – are they fit for purpose? The factors insurers typically price on include your age, the number of miles you [drive a year](https://www.financedigest.com/electric-vehicle-polymers-market-what-factors-will-drive-the-market-in-upcoming-years-and-how-it-is-going-to-impact-on-global-industry-2021-2029.html "Electric Vehicle Polymers Market? What Factors Will Drive The Market In Upcoming Years And How It Is Going To Impact On Global Industry 2021-2029"), what car you have, where you live and what you do for a living. [Emerging data sets at the scale generated](https://www.financedigest.com/surgical-masks-market-emerging-trends-and-will-generate-new-growth-opportunities-status-2030.html "Surgical Masks Market: Emerging Trends and Will Generate New Growth Opportunities Status 2030") by connected cars and other connected sensors or devices challenge the traditional approaches.   What value can machine learning techniques bring to pricing on streaming data sources? And with all these additional sensors and new technology added to vehicles, do accidents that typically result in low value [claim costs now change?](https://www.financedigest.com/unitedhealth-to-sell-change-healthcares-claims-business-for-2-2-billion.html "UnitedHealth to sell Change Healthcare’s claims business for .2 billion")?

New technology, like that from the recently acquired Mobileye, can help customers’ vehicles stay in lane and brake in an emergency. Technologies like Mobileye’s can also collect information from installed cameras to [continuously update maps that self-driving cars](https://www.financedigest.com/adnami-continues-its-european-expansion-by-introducing-new-partnership-with-largest-pan-european-online-car-market-autoscout24.html "Adnami continues its European expansion by introducing new partnership with largest pan-European online car market AutoScout24") will use. There is a torrent of potential data sources being streamed from [technologies like this and if insurers](https://www.financedigest.com/how-technology-can-support-insurance-business-growth.html "How technology can support insurance business growth") are willing to change their models, they can benefit from the insights this data can provide.

Telematics is another area that is going to evolve quickly. [Insurance providers are already using this technology to measure how well people are driving](https://www.financedigest.com/u-s-regulation-fears-drive-insurers-climate-alliance-break-up.html "U.S. regulation fears drive insurers’ climate alliance break-up"), how often they drive and what time they drive. As mentioned before, [car manufacturers are also starting to recognise the value of the data that comes](https://www.financedigest.com/being-aware-of-the-insurance-blind-spot-when-it-comes-to-driverless-cars.html "Being aware of the insurance blind spot when it comes to driverless cars") out of a vehicle, especially as cars become more connected. This data and insight can help inform predictive maintenance and develop bespoke [service packages](https://www.financedigest.com/outbreak-of-the-covid-19-pandemic-is-expected-to-severely-affect-the-global-packaging-and-labelling-services-market.html "Outbreak of The COVID-19 Pandemic is Expected To Severely Affect The Global Packaging And Labelling Services Market ") suited to individual cars and driver’s needs.

We are seeing a change take [hold across the industry](https://www.financedigest.com/what-will-2022-hold-for-the-insurance-industry.html "What will 2022 hold for the insurance industry?") as more tech-driven businesses start to recognise the opportunity this ever more connected world offers. The big incumbent [insurance players](https://www.financedigest.com/why-are-we-seeing-a-flurry-of-exits-by-global-insurance-players-from-asia.html "Why are we seeing a flurry of exits by Global Insurance players from Asia?") can find it hard to adapt fast enough to exploit these changing customer and vehicle dynamics. [Insurance companies](https://www.financedigest.com/building-stronger-relationships-with-insurance-companies.html "Building Stronger Relationships With Insurance Companies") should be asking themselves: how can I use technology to provide a better customer experience? Whether it’s through in-house innovation or partnerships with external InsurTech innovators, [success almost always comes from an ability to exploit data through analytics](https://www.financedigest.com/predictive-analytics-a-new-way-of-insuring-success.html "Predictive analytics: a new way of insuring success"). Analytics has the power to help incumbent car insurance companies – many of which are established and trusted brands – remain relevant to consumers, the way we live our lives today and protecting us against the new and emerging risks we face.


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