WTW (NASDAQ: WTW) has announced the launch of new price inflation forecasting technology for insurers. The ground-breaking tool uses Audatex’s repair data, which covers 98% of all UK vehicles, augmented by machine learning and comprehensive historical data analysis by WTW. The technology has been developed to predict inflationary effects on vehicle repair costs for multiple vehicle categories, with unparalleled granularity, as validated on historical data.
Traditionally, insurers and underwriters have used a single inflationary figure across the board for predicting the future cost of vehicle repairs. However, 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.”
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.”