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There have been a number of changes in the auto insurance market lately, both for customers and car insurance companies. In the near future, analysts say it will be essential for car insurance companies to keep up with these changes in order to be successful.

PriceWaterhouseCoopers has made some suggestions about changes that the insurance industry should be prepared for.

“Regulatory, standards setting, and legislative developments will present considerable challenges to insurers’ entire organizations. Everything from compliance, financial reporting, and actuarial to systems and HR will feel their impact,” said Tom Sullivan of PwC.

Government regulations

A number of recent regulatory changes made by the government may impact the auto insurance industry, and companies may need to prioritize keeping up with these changes, PwC says.

One major regulation to take note of is the Dodd-Frank Wall Street Reform and Consumer Protection Act, and its impact on insurance companies. In its current form, the bill has only a limited impact on insurers, but as lawmakers continue to implement its provisions, more specific impacts may come to the surface.

One immediate impact of the rule will is the use of credit scores. If an auto dealer, mortgage lender or insurance company uses a consumers’ credit scores to justify giving them a less favorable rate, they need to provide them that score.

Technology challenges Faced by Car Insurance companies

Another major change that car insurance companies may need to prepare for is the inclusion of more interactive technology, which is beginning to play a major role in the marketing and selling of car insurance coverage.

In addition to a number of people getting auto insurance quotes online, according to PwC, the number of people actually purchasing coverage for their vehicles over the web has increased 28 percent. The source says this has led to a major decline in the number of agents and brokers personally selling insurance coverage.

“Customers are used to real-time, multi-media interaction in all aspects of their daily business and personal lives, and they expect the same convenience and accessibility from their insurance providers,” said Jamie Yoder of PwC. “As a result, the role of the insurance advisor is being permanently altered, and insurance providers are focused on meeting customer demands across all channels.”

In order to keep up with the shifting use of technology, PwC suggests insurers increase their investments in operations and platforms, human talent and enterprise-wide intelligence. By optimizing many aspects of their company to keep up with technology and customer demands, insurance providers may be able to automate a number of services, making them simpler for customers. At the same time, they can redirect their workforce to more human-dependent areas, potentially making their insurance company stronger and more efficient.

Additionally, car insurance companies can use technology to make more accurate risk predictions and be better able to predict the future of the market in order to make more accurate decisions. This may be particularly important in a time of widespread change.