Photo/Illutration Sompo Japan Nipponkoa Insurance Inc.'s service provides quick estimates of car repair costs through pictures taken by smartphones. (Provided by Sompo Japan Nipponkoa Insurance Inc.)

Sompo Japan Nipponkoa Insurance Inc. has introduced a service using artificial intelligence that can estimate repair costs for damaged vehicles through smartphone pictures and provide insurance payouts in half an hour.

Under the usual process, insurance money is paid two or three weeks after the company accepts the damage claim.

The new system, which started on Nov. 15, is intended to cover minor accidents involving repair costs of 200,000 yen ($1,844) or less. These account for about 20 percent of all car accidents handled by Sompo Japan Nipponkoa Insurance.

After an accident occurs, an insurance policyholder takes pictures of the damage using a dedicated app available on Sompo Japan's account on Line Corp.’s messaging service.

AI technology analyzes the pictures, and in several dozen seconds, the app shows the estimated repair cost on the smartphone screen. The photos and the estimated cost are sent to the insurer via Line.

Under normal circumstances, insurance company employees must see the damaged car and make an appointment with a repair shop to assess the cost.

The new service removes the need for such procedures and can speed up insurance payments in 30 minutes at the fastest. It can also reduce labor expenses for the company.

The system was developed in a tie-up with Tokyo-based e-dreamer Inc., which runs an auction business for cars damaged in accidents.

About 350,000 pictures of damaged vehicles were scanned for the system. The AI program comes up with a repair cost by comparing the damage with these photos.

According to the company, the error range between the AI-derived estimates and the actual repair costs is within 5 percent. It will aim to enhance the precision of the system by accumulating more data.

However, Sompo Japan said it is difficult for the system to assess parts damaged after the vehicle was submerged in water. The company plans to further expand the range of the AI technology to help customers whose vehicles are damaged by natural causes, such as typhoons.

Other insurers have introduced systems using AI technology.

Last year, Mitsui Sumitomo Insurance Co. and a Japanese startup created a system to scan picture data and determine damaged parts as well as the damage level.

The system is used to check cost estimates and shorten the period before insurance payments are provided.

Tokio Marine & Nichido Fire Insurance Co. plans to invest in a U.S. venture firm for a system that can complete all post-accident procedures on smartphones.

The insurer hasn’t revealed details, but a public relations official said the company’s goal is to have part of the service in practical use within this fiscal year.