Insurance and the Power of Data: How Machine Learning is Changing Pricing and Risk Assessment
As technology evolves, so do the data practices insurers use to optimize pricing and risk. Machine learning is a new tool that goes beyond what an actuary can craft, and the impact it will have on what you pay for insurance is becoming noticeable. In this beginner’s guide, we’ll explore the power of machine learning in the insurance industry and its potential impact on consumers’ pockets.
Understanding Machine Learning
Machine learning enables computers to learn without human intervention. In insurance, machine learning can act like an underwriter, analyzing immense amounts of data to determine the ideal premium for each consumer. As machine learning gains more data and adapts to the past, its future predictions become more accurate.
Optimizing Premium Dollars
Machine learning in insurance is a tool that will help the underwriter make decisions with more precision. Insurance companies can analyze a vast amount of data on millions of drivers and use it to recognize patterns and assess risks, which helps them craft tailored premiums for each consumer. With machine learning, insurance companies can offer customers competitive premiums while simultaneously decreasing the loss and expense ratios.
The Impact on the Consumer
The more data insurance companies collect, the more accurately they can assess their customers’ risk, and thus, their policy premiums. What’s more, machine learning can help implement these changes with a lower personnel cost, which could allow insurers to offer customers lower premiums. If you have good driving habits, machine learning could mean a reduction in your premium. If you are high risk, insurance companies may be more likely to increase your premium charge, as they’ll be able to more accurately assess the risk exposure you present.
As insurance providers gain more data, technology like augmented reality may soon fill up the windshield of a consumer’s vehicle. An augmented reality overlay could alert you to current speed limits, encouraging you to lay off the gas a bit. The combination of this data in front of you, as well as the stream of data being fed back and forth between your car and your insurance carrier, could lead to fewer accidents, more accurate pricing, and potentially lower premiums.
Seek Legal Help from a Car Accident Attorney
If you happen to be in an accident, seeking legal help from a car accident attorney is crucial. An experienced personal injury attorney will evaluate your particular case and work to obtain the best result for your needs. They will maintain objectivity and work with you to find the best resolution to your case. A qualified injury lawyer will be able to determine, based on your specific circumstances, whether your claim is best resolved through mediation, saving you time and money.
Machine learning is a powerful movement in the insurance industry. As data expands, so do the opportunities machine learning presents. This technology is likely to change the insurance industry, and consumers will see the impact where it matters most — in their pocketbooks. By leveraging data in new and innovative ways, insurance companies can provide better coverage at a lower cost, benefiting both themselves and their customers.