The car insurance field is constantly evolving.

Insurance companies must not only to respond to ever-changing and increasingly sophisticated customer needs, but also embrace new technologies and ways of doing business.

The insurance business is likely to see big changes in the year 2021, in part thanks to the pandemic, which has drastically altered how we live and work. Here are a 4 trends in the insurance industry to look for this year.

1. Insurance Premiums Will Drop

One of the major ways COVID-19 has impacted the insurance industry: far fewer cars on the road, which means fewer claims, which translates to lower premiums for customers. According to Forbes, average auto insurance rates in the U.S. is likely to decrease by 1.7% on average in 2021, with dips as large as 4% in some states.

The bad news is, rates will likely jump back up in 2022 as the pandemic recedes, and life (hopefully) gets back to normal for many Americans.

However, it's still expensive to insure a car in the United States: an average annual cost of $1,416, up over 100% from what it was just a decade ago.

Fortunately, there are some time-trusted ways car owners can save on their insurance, either to help get through the pandemic or take advantage of the temporary drip in premiums:

• Shop around among competing insurance carriers to see who carries the lowest rates for your personal situation and needs. Premiums can fluctuate wildly between companies (up to 240%!), so it literally pays to shop around.
• Consider your car. When it comes to insurance policies, not all cars are created equal. Some cars cost significantly more (or less) to insure than average. Of course, you may not be in a position to change the car you drive, but it's worth looking into.
• Change your deductible. Raising your deductible means taking a bigger financial hit in case of accident but can save you over the long term so you're not paying for insurance you don't need.

2. More Personalized Customer Service

More personalized, tailor-made customer service isn't just for car insurance -- it's expanding in every industry. Customers want more from the companies they work with, and savvy insurers can use the data they collect on customers to create a more personal customer experience, driving up loyalty and raising customer retention.

Good customer service in the 21st century means more than just a phone bank. Communication with customers happens over multiple channels: email, text, social media, and more.

Technology is rising to the challenge of creating a better customer experience, as well -- with the aid of AI chatbots and automated texting, customers can get answers to their problems right away -- which can make all the difference in the insurance game.

3. Articial Intelligence and InsurTech Will Continue to Grow 

Artificial technology is already changing how car insurers work. Through data science and AI, insurance companies have a broad new frontier of information to work with.

For example, AI can collect data about weather patterns in certain areas to help assess risk selection and pricing.

For car insurance in particular, the collection of driving data through telematics is already changing the game. Machine learning algorithms can use this data to personalize risk profiles for customers and incentivize customers to drive more safely by assessing that data and reward good driving behavior -- or punishing bad behavior.

4. More Blockchain Technology and Cybersecurity in the Car Insurance Sector

Although wide understanding of blockchain technology is still fuzzy, blockchain is poised to become one of the next big things in insurance.

In simple terms, a blockchain is a decentralized ledger that can track and record digital transactions (which are stored inside a "block"). Because the ledger is distributed, it's much more secure, trustworthy, and incorruptible.

Because the chain of blocks (thus the name) is regularly updated, the transaction data is also updated and validated.

What does this mean for the insurance industry? It means insurance companies can track claims by looking at the trusted ledger, making it easier to track driving history or behaviors, and keep an irrefutable record of those behaviors. Even between parties that don't work together or are competing, the blockchain information is transparent and cannot be tampered with.

This means a drastic reduction in the possibility of fraud -- to the point where fraudulent claims are virtually impossible.

Blockchain will also dramatically speed up the underwriting process and the know-your-customer (KYC) process, because of the comprehensive and reliable nature of blockchain storage. When all parties involved can have the same access to the same information (like customer history), traditionally lengthy processes are much quicker. This also means insurers can craft cheaper policies by tracking customer information like the number of hours driven.

In short, blockchain technology is about to work wonders for insurers and drivers alike, saving time, reducing fraud, and making the sharing of information much more secure. In short, everyone wins.