Willis Tower Watson (WTW), in partnership with Solera Audatex, has launched a price inflation forecasting tool for auto insurers.
Solera is a vehicle lifecycle management software-as-a-service company operating four lines of business: vehicle claims, vehicle repairs, vehicle solutions and fleet solutions. Solera Audatex is its estimating system business which the company acquired in 2006.
The tool uses Audatex’s repair data, which cover 98% of all UK vehicles, augmented by machine learning and comprehensive historical data analysis by WTW.
WTW said the technology has been developed to predict inflationary effects on vehicle repair costs for multiple vehicle categories.
Traditionally, WTW explained that insurers and underwriters have used a single inflationary figure across the board for predicting future repair costs. However, these blanket pricing policies making underwriting inefficient and ineffective when taking into account the range of fuel types, manufacturers and transmission types that comprise the UK vehicle population. This is further compounded by particularly high interest rates in the UK brought about by the pandemic and the Russia-Ukraine conflict.
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 under-priced 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.”
Tom Hart, head of account management at Solera Audatex, added, “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.”
Earlier this year, WTW partnered with InsurTech Tempcover to deliver a usage-based automotive insurance solution.
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