AI in smash repair – independent reviewer recommends codification
AI in smash repair – independent reviewer recommends codification | Insurance Business Australia
Motor & Fleet
AI in smash repair – independent reviewer recommends codification
Technology could play future role in dispute resolution, report says
Motor & Fleet
By
Jen Frost
Artificial intelligence (AI) use in claims and the smash repair industry came under the microscope in the recently published independent review for the Motor Vehicle Insurance and Repair Industry (MVIRI) Code Administration Committee (CAC), with a recommendation having been levelled that AI use should be codified.
The report, authored by independent reviewer Dr Michael Schaper, said there is “scope” for the MVIRI code of conduct to clarify AI issues and for further education around the use of the technology, and noted that it may play a future role in dispute resolution.
“Some forms of artificial intelligence (AI) are already having an impact on the smash repair industry, on the nature of work performed, and in how insurance claims are assessed and processed,” the report said. “In future, AI may also be applied to some basic forms of dispute resolution.”
AI in the insurance and smash repair industries – four issues
The independent review pointed to four smash repair AI issues that could be addressed:
Whether insurers should be required under the code to tell repairers that an assessment or estimation has been carried out by AI
The rights smash repairers have to dispute assessments and estimations made using AI, and whether these are the same as their rights under the current code
What operating rules (or algorithms) and assumptions are used in AI assessments
Whether insurers should tell repairers if an internal dispute resolution (IDR) is dealt with by AI, and whether repairers should have the right to request that a person handles the matter instead
What did insurance and smash repair industry participants have to say about AI use in smash repair?
Numerous respondents identified AI as an important emerging issue for repairers and insurers, and something that is already being used across the industry, though the reviewer noted that “few specific suggestions” were made.
“AI is already in place – take a picture and it starts writing a quote. This allows you to use less qualified assessors, so there’s no need for a skilled estimator,” said one respondent. “We need to think about this in the Code.”
Another said: “AI is already here, and utilised in many places … you need for the CAC to prepare and educate parties about role of AI in the Code, and to clarify issues around AI.
“This includes disputes based on AI and AI-generated quotes which are based on images.”
The joint role of humans and AI was also raised by respondents.
“AI works in predicting claims costs; but isn’t going to necessarily do the physical work of the machine,” one commenter said. “It can’t perform the work, so only a small amount can be done by robots.”
The MVIRI code of conduct – independent review makes 15 recommendations
AI codification was just one of 15 recommendations made by Schaper, who was tasked by the MVIRI Code Administration Committee, made up of equal representatives from the Insurance Council of Australia and the Motor Trades Association of Australia, to examine key areas of the code. According to the report, the 15 recommendations made were:
Clarify and strengthen provisions relating to dispute resolution process
Update the code’s language, presentation and format
Undertake greater public promotion of the code
Work more closely with regulators
Update the code’s website URL and its contents
Introduce sanctions for breaches
Appoint an independent CAC chair and deputy chair
Clarify CAC governance, membership, voting and training
Incorporate the CAC as a formal legal entity
Better resource the CAC
Codify practices relating to AI use
Review educational requirements
Greater consumer focus
Clarify the role of third party representatives
Change the frequency and focus of future code reviews
With the code now mandatory in both NSW and South Australia, and a “real possibility” that this could extend to Tasmania, the review said that it is “increasingly important” that the code undergoes a considered and thorough rewrite.
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