Re/insurance broker WTW has announced the launch of a new price inflation forecasting technology for motor insurers that leverages advanced machine learning.
In collaboration with Solera Audatex, WTW developed this tool to help motor insurers more accurately allow for the future cost of motor repairs in their pricing.
The “ground-breaking tool”, as described by its developers, uses WTW’s comprehensive historical data analysis and Audatex’s repair data, which covers 98% of all UK vehicles, augmented by machine learning technology.
Tom Hart, Head of Account Management at Solera Audatex, said: “By making it possible to differentiate inflationary allowances between vehicle makes and models, this new price inflation tool allows insurers to boost their bottom line and offer more competitive pricing to customers.”
Traditionally, insurers and underwriters have used a single inflationary figure across the board for predicting the future cost of vehicle repairs.
However, WTW explains, the UK vehicle population has never been more complex, with the range of fuel types, manufacturers, and transmission types, making blanket pricing policies for underwriting inefficient and ineffective.
These challenges are further compounded by the UK currently having the highest inflation rate in the G7, with Brexit, COVID-19 and the Russia-Ukraine conflict combining to create unprecedented supply chain challenges.
Stephen Cox, Head of Data Partnerships, Insurance Consulting, and Technology, at WTW, said: “This tool offers insurers a significant competitive advantage.
“In such a volatile market, access to accurate cost predictions gives underwriters the ability to avoid underpriced business, while also making their service more attractive to those consumers who will no longer face prices that are unduly high owing to being based on an average of all vehicles.”
