Artificial Intelligence, IoT, and Blockchain are about to completely disrupt the car insurance industry. Here’s how…
The insurance industry is prone to fraud and whether it is knowingly, or unwittingly fraud within the industry, ultimately, drives the cost of insurance up for everyone. Smart Contracts and Blockchain could allow validation without giving all of the details away. Some insurance companies have made positive steps with technology, black boxes for younger drivers, for instance, but we believe the industry is now ripe for disruption and insurers and consumers will feel the benefits.
How it will work
Onboard cameras, like Dashcams, are now commonplace in many vehicles. With the advent of 5G technology and the ubiquity of connected devices in, and out of vehicles, Smart Contracts, Blockchain and IoT combined could elegantly solve many issues to the benefit of the insurer and the insured.
For instance, validation of a claim (to ensure the car has no modifications) could happen ‘on the fly’. A Smart Contract could feed information about engine output directly to the insurer. When an accident happens the car could automatically to the insurer via Smart Contract.
Pay-Per-Mile insurance could work on the same concept – ‘off-peak’ miles could become cheaper and consumers could ‘top-up’ their payments using a Smart Contract via a digital wallet.
How technology can make insurance cheaper for everyone
IoT technology could make insurance cheaper. Real-time information submitted to an insurance company will deliver pricing based on empirical evidence, rather than the dark arts of insurance companies algorithms and other often-arbitrary factors such as age or postcode. Over or underestimation of annual mileage could become a thing of the past.
How does this become a reality?
The first 5G phones are expected to hit the market in early 2019. The mobile networks, traditionally, operate at a glacial pace but we expect with the advent of far more data-hungry devices and connected ubiquity a tipping point will be reached quickly; remember how quickly it took for suddenly everyone to have a smartphone? We have established a platform, we are just waiting for the networks to catch up, we then anticipate things will snowball rapidly.