What does that look like? Often, I talk to my colleagues and peers about "making it real" for the market, especially in the face of change. Let's look at examples across different insurance segments where the data is making a significant impact for insurers who leverage it correctly.

Advanced Driver Assistance Systems (ADAS), Automatic Emergency Braking (AEB), connected mobile apps, digital keys, 360-degree cameras, over-the-air updates and the symbiosis between the vehicle and smartphone devices through infotainment displays have turned the driving experience from purely analog to a high-tech encounter behind the wheel. That data is now being utilized in telematics exchanges, and insurers can capitalize on this robust information as an avenue to glean more informed data on driving behaviors, ticketing and enforcement initiatives. With only 22% of consumers using their driving and vehicle data for discounts on their insurance premium, there is an opportunity for growth in telematics adoption.
Electric Vehicles are gaining popularity and claims departments are learning on the fly in some cases. The U.S. insurance industry has a unique opportunity to learn from other markets and develop strategies to stay ahead. According to our internal analysis of claims data in the Chinese market, claims frequency of EVs is on average 56% higher and claims severity on average 52% higher, than those of internal combustion engine (ICE) vehicles across all vehicle price ranges. Claim frequencies are even higher for those households where garages contain an EV and ICE vehicle versus those with just one type of vehicle. With EV sales in the U.S. projected to surpass one million by the end of 2023, the time to learn and stay ahead is now.
The home insurance market needs technology more than ever before. While it is hard to predict catastrophic storm events that continue to plague the industry, we can look for other ways to drive profitability. 45% of home losses originate from perils inside the home. AI-driven, consumer-led survey platforms are now driving more accurate interior, exterior and aerial data insights needed to help improve property underwriting. You must continue to review your own business to help ensure your existing portfolio is driving the expected profitability.
In commercial insurance, our research tells us that small commercial companies of 50 employees or fewer make up over 95% of the market with roughly 41 million quotes being made annually between new business and renewals. There is massive opportunity in the commercial space for innovative thinkers to infuse data directly into their existing workflows to improve automation efforts and to continuously review their portfolios at renewal.
Contributory data information can help carriers see what you are missing from an even more granular standpoint, whether it's duplicate records or outdated ownership change dates for newly acquired vehicles, helping insurers find 5% more current owner and 27% more prior owner damage events.
In the personal auto insurance market in 2022, we saw 9% of rate added to the market, and currently project the market will add another 14 points by the end of the year.

AI and the possibilities ahead

Will the use of AI in 2024 separate the market leaders from those unwilling to change? There's a high probability given past innovation. The foundation of AI is not new, but it has certainly evolved beyond anything we imagined back then.

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Road to profitability: How are you adapting to radical changes in U.S. insurance?

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