Innovation

How one insurance startup is using AI to slash rates for customers

Clearcover is using machine learning to customize coverage, leading to lower costs.

Building a slide deck, pitch, or presentation? Here are the big takeaways:
  • Clearcover, a car insurance startup, launched an AI-driven business model in California.
  • Clearcover's model uses machine learning technology to cut costs and identify the best plan for each person, potentially leading to cheaper insurance for drivers.

One car insurance startup is banking on artificial intelligence (AI) to help it provide its customers with lower rates.

Clearcover launched in California on Tuesday, according to a blog post from the company's founder and CEO Kyle Nakatsuji. By using machine learning technology, the company can help drivers select the best insurance plan for their needs. Along with cutting overhead costs, the AI-driven model could help people find cheaper insurance.

This nontraditional way of applying AI could also inspire other companies across industries to look at how the emerging technology could boost their business, whether by providing better products or services or reducing costs.

SEE: IT leader's guide to the future of artificial intelligence (Tech Pro Research)

Clearcover uses SmartCover, an AI-driven tool that recommends simpler, customized insurance packages. The tool could potentially lead customers spend less on insurance than what they're currently paying.

SmartCover was trained with millions of insurance data points, according to the Clearcover website. As the company collects more data, it will be able to understand purchasing patterns, and the algorithm will become more tailored, the company said.

The company also uses AI to expedite the claims process, according to its website.

Clearcover also plans on reducing insurance costs by spending less as a whole, especially on advertising, Nakatsuji said in the post.

"Instead of spending billions every year on TV commercials and celebrity sponsorships designed to buy your trust, we plan on earning it," Nakatsuji wrote.

Also see

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Image: iStockphoto/artisteer

About Olivia Krauth

Olivia Krauth is a Multiplatform Reporter at TechRepublic.

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