WTW has launched a tool that will help insurers predict inflation of vehicle repair costs across multiple vehicle categories, validated on historical data.
The technology uses Audatex’s repair data, which covers 98% of all UK vehicles, augmented by machine learning and comprehensive historical data analysis by WTW.
According to WTW, insurers and underwriters have traditionally used a single inflationary figure across the board for predicting the future cost of vehicle repairs. However, the UK vehicle population is very complex, with a wide range of fuel types, manufacturers, and transmission types. This makes blanket pricing policies for underwriting inefficient and ineffective, WTW said.
The UK also has the highest inflation rate in the G7, and it is experiencing supply chain challenges due to Brexit, COVID-19 and the Russia-Ukraine conflict.
“This tool offers insurers a significant competitive advantage,” said Stephen Cox, head of data partnerships, insurance consulting and technology, WTW. “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.”
“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,” said Tom Hart, head of account management at Solera Audatex.