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We are witnessing an exciting time in the automotive industry.

As innovation is reaching new heights with connected and autonomous vehicles, the auto insurance industry is also experiencing its own evolution, using technology to enhance the way road accidents and damages are handled, saving people time and money and improving the often stressful experiences of handling the aftermath of accidents.

A transformation is badly needed in the insurance industry.

In addition to poor customer experiences when making claims, some $25 billion goes unaccounted for each year due to adjuster costs, fraud, delays in repair shops and more. Innovation can change that -- and it is already starting to.

Insurers -- like some car companies now do -- need to think of themselves as technology companies, embracing more AI and data, and also more seamless customer experiences. This is especially importance since insurers will likely have an even deeper relationship with automakers once cars can drive autonomously, at which point the auto company takes responsibility if there is an accident.

These innovations can save time and money while improving transparency, accuracy and efficiency, which are all important to improving the customer experience.

AI and computer vision are among the technologies that can offer the most impact, and their use in growing in insurance. Mobile phone cameras can scan cars after accidents, replacing insurance adjusters in assessing collision damages, making the process faster and more objective.

The next step, now emerging, is using AI and computer vision to automatically generate not just records of damage, but also estimates for how much that damage will cost to repair.

This works by having an expansive database of parts and prices where estimates can be generated when a photo of the damage is uploaded. This puts the power into the hands of the driver or vehicle owner, and takes it out of the repair shops that have for decades relied on the mentality that if the insurance company is paying for it, we can charge as much as we want -- resulting in bloated costs for all parties involved.

If consumers can eventually do this entire process themselves -- not only record damage with their phone cameras, but upload it to their insurance company's platform, and get an instant estimate for the cost of repair -- this would save insurance companies time and money, resulting in lower premiums while empowering the consumer in ways we have yet to see.

Eventually, as cars become more connected and software-based with more sensors, repair costs could be automatically generated by the car's operating system communicating with a digital insurance platform at the time of the car crash. While not available yet, the technology is quickly heading in this direction.

Telematics, which uses GPS devices to track a car's location, distances driven and other factors such as speed, has already led to individual policy pricing. Drivers who demonstrate safer habits can get lower prices on insurance coverage, or, under some plans, just pay for insurance coverage when their car is in use and not while it is sitting in the driveway.

Other data, much of it currently going by the wayside in roadside cameras and sensors, onboard sensors and other IoT devices plus text like accident reports and past claims, promises to add even more information that insurance companies can leverage.

By eventually structuring this data into a usable form that can be analyzed, AI will be even more powerful in determining risk profiles and helping set more exact and personalized policy pricing.

Privacy is also important and insurers will need to make sure to have policies that protect the privacy of their customers who are providing them with an influx of data. In addition to abiding by privacy policies, like GDPR (General Data Protection Regulation), insurers will need to offer benefits, like premium discounts or coupons, to those who share their data.

Now is the time for insurance companies to take advantage of increasing AI and data abilities to prioritize customer experience.

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Artificial intelligence in auto insurance will give more power to car owners - Automotive News Europe