Safety technology is enhancing overall passenger safety and accident prevention. New technology is supporting safer driving efforts through the use of driver assistant systems, such as accident prevention, collision detection, well-designed navigation and enhanced communications technology.

New technology is making our cars safer and producing less frequency of accidents and fatalities. According to the National Highway Traffic Safety Administration, 2023 showed a decrease of 3.6% in vehicle and traffic fatalities from 2022, and 35 out of 50 states have reported decreases in fatalities related to car-related accidents. The U.S. Department of Transportation is also committed to improving and deploying new safety technologies within vehicles to keep these numbers down, as they are committed to new regulations that will require vehicles to have automatic emergency braking on both passenger and commercial vehicles. 

Yet, while we are seeing a drop in the frequency of accidents, these safety features are making repairs more expensive. And despite the positive impact safe driving technology has made to improve on decreasing the number of accidents, there are still many vehicles on the road that don't have advanced safety features.

Preparing for Today's Accidents 

The introduction of safe driving technology has had a tremendous impact on increasing claims costs. Newer cars have complex computer components which are costly and time-consuming to repair. Driving assistance systems use radar, cameras and sensors to warn drivers of hazards. Emergency braking and lane change warnings also impact the rising costs to repair. As a result, traditional auto repair technicians need to be supplemented by more tech-savvy professionals, an emerging skill set for repair shops.

All of this affects the time to repair, which also impacts the number of days a claimant may need a rental car, causing an increase in the cost of the claim. Unfortunately, consumers will likely see increases in their annual auto policy renewal premium due to these rising costs.

Dealing with the high costs of accident repair and insurance claims is often challenging for consumers both mentally and financially. To combat these concerns when consumers are digging further into their pockets to pay for premiums, it is important to create a great customer experience.

Service is at the core of what the insurance industry offers, which means working fast to process claims and get people back to their vehicle. It is also extremely important for insurance carriers and agents to communicate frequently and be transparent with their customers, setting expectations ahead of time and being honest with repair timelines.

Additionally, as with all customer-agent interactions, this is an opportunity for agents to demonstrate their value by informing customers of factors behind a rate increase as they guide them through their claim journey.

While not always an easy discussion to have, customers need education about how inflation and economic stressors are impacting the rise in insurance rates. Agents have an opportunity to be a supporting guide to their customers in times like these.

The Impact of AI

While automotive manufacturers, insurance carriers, agencies and consumers nationwide continue to manage the impacts of inflation, there are new technologies impacting the industry, including artificial intelligence (AI), that will have the potential to help insurance carriers and agents provide a faster and better experience for their customers.

AI is increasing the prevalence in vendor products as carriers look to improve the end-to-end insurance life cycle for customers. AI may likely provide a faster appraisal and claim handling process in the future, but it will not—and should not—completely replace the customer service aspect and intuitiveness of the agent and claim service professional in its entirety.

Independent agents will continue to be a critical component of the service delivery process. Combined with new technology that will enhance data and analytics and improve agent's ease of doing business, technology enhancements will continue to make our roads safer—despite the impact on claims costs.

And while technology will help drive improvements, an empathetic human to support customers in a time of need can never be replaced.

Paul Brady is executive vice president and head of claims at Arbella Insurance Group.