How Technology is Transforming Car Insurance

transforming car insurance

Technology is transforming car insurance in Africa and around the globe like every aspect of our lives, and there is no stopping it. Whether you are a consumer or an insurer, there are immense benefits for all parties.

The ongoing transformation already means tailored premiums, better motor insurance covers, improved customer service and consumer experience. 

While for insurers, it leads to lowered risks, reduced cost, customer satisfaction, retention and enhanced workforce productivity. 

Yes, you guessed right, it is a win-win situation for all.

Looking at the reasons why technology is transforming car insurance, we may categorise it into the following areas:

Changing Consumer Needs & Behaviours: Generally, consumer behaviour, experiences and needs are often at the core of technological insurance advancements. For example, a consumer survey in 2019 showed that around 30 to 40% of users were comfortable sharing their location and driving data with insurers.

Smart & Driverless Cars: New technology trends present new risks and challenges for insurers and consumers. Smart and driverless car trends mean that auto insurers must keep up with the automotive industry to analyse car insurance risk and improve underwriting.

Deepen Insurance Penetration: Insurers need to deepen insurance penetration as it is below the 3% mark in Africa. In Nigeria, for example, out of 13 million cars, only 3.4 million vehicles have any insurance required by legislation. 

Elsewhere on the continent, a report in South Africa says, “there are roughly 10 million passenger cars on South African roads, but only 2.5 million or so are insured.”

Technology is the solution to tailor product premiums and make easily accessible motor insurance and claims for consumers when and where they need it—for example, buying insurance bundled in their car purchase or during registration via an embedded distribution technology.

Lastly, adopting technology is also a business need for insurers to stay with industry trends, remain competitive and achieve their business goals. Let us check out the ways technology is transforming motor insurance.

Ways Technology is Transforming Car Insurance

1. New Pricing Models: Artificial Intelligence enables insurers to create new pricing models and tailor them for consumers based on individual risk and usage profiles. Auto insurance plans like “Pay as You Drive or Pay How Drive” show how technology transforms car insurance through new pricing models. 

2. Embedded Distribution: A Solution like Octamile’s All-in-One Insurance Management Saas solution is helping insurers embed motor insurance products in the non-insurance ecosystem. It is changing how insurers distribute car insurance to consumers while generating sales at zero marketing and sales cost.

3. Fraud Detection and Prevention: Fraud and insurance always seem inseparable; for some insurers, it takes up about 10% of their annual budget. AI, Machine Learning, Risk Analysis Technology and other automation technology are now helping insurers identify different forms in seconds, increasing the health of their business and reducing risk.

4. Claims Automation: The claims management technology is another example of how it is transforming auto insurance. Consumers can now file and get claims payout in minutes compared to waiting for months. 

Octamile’s Claims Automation Solution enabled a partner to automate claims management leading to their ability to pay out a certain threshold of motor insurance claims within 60 minutes.

It also helps insurers maximise productivity with virtual inspection features and fits into their workflow and rule-based decision-making without disrupting a working model or enterprise technology.

5. Risk Analysis & Selection: Car insurance risk selection is the process by which vehicle insurers determine whether or not to insure an individual and what insurance premium to charge. 

Minimising risk is of great importance to the health of every insurance business. While it may not be unavoidable, the ability to unlock predicting and mitigating risks opens a new world of possibilities.

Technology is helping auto insurance organisations to do this faster for comprehensive car premiums and claims underwriting in Nigeria. 

See how we are powering risk assessment reports for car insurance underwriting, claims and financing in minutes.

6. Customer Data: Wearable Technology, Smartphones, GPS Technology, and Telematics are equipping insurers with new customer data points for product design, pricing and risk assessment.

Other Ways Technology is Transforming Car Insurance

The change experienced so far will continue as new technology and consumer experiences are unlocked. Chatbots, Car insurance comparisons, Car Insurance Apps, Loyalty Programs, and Remote Inspection are other technology-driven or enabled transformations happening in the auto insurance space to watch out for.

About Octamile’s Insurance Management System

Octamile is an insurtech startup building Africa’s digital insurance technology infrastructure. Our All-in-one insurance management system enables full-scale or partial digitisation of motor insurance distribution, risk profiling and claims automation.

Car Insurers and brokers can improve motor insurance customer satisfaction and turnaround time and reduce administrative costs by up to 30% with our technology for car insurance. Contact us to schedule a meeting with our team or email us at We look forward to working with you.

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