Auto-insurance carrier USAA has started using a cloud-based artificial-intelligence platform designed to tally the cost of fender benders and other collisions within seconds, based on drivers’ smartphone photos of their damaged vehicles, the company said.

The nearly century-old firm’s adoption of AI-powered software tools comes as insurers across the industry raise efforts to digitize and speed up largely manual processes, which can take weeks to estimate repair costs and assess claims.

The...

Auto-insurance carrier USAA has started using a cloud-based artificial-intelligence platform designed to tally the cost of fender benders and other collisions within seconds, based on drivers’ smartphone photos of their damaged vehicles, the company said.

The nearly century-old firm’s adoption of AI-powered software tools comes as insurers across the industry raise efforts to digitize and speed up largely manual processes, which can take weeks to estimate repair costs and assess claims.

The new platform, developed by software maker CCC Intelligent Solutions Inc., a subsidiary of CCC Intelligent Solutions Holdings Inc., runs photos of accident-damaged vehicles through an algorithm trained on a vast data set of comparable photos and coverage policies, said Githesh Ramamurthy, the company’s chairman and chief executive officer.

The data set includes more than one billion photos of banged up and dented cars, from budget sedans to Bentleys, along with some $1 trillion worth of historic auto-insurance policy claims, Mr. Ramamurthy said.

The system, which runs entirely in the cloud, links a sprawling network of insurers, mechanics, auto makers, parts suppliers, lenders and other auto-industry related services, which feed real-time data back into the algorithm to continually fine-tune its estimates.

By running policyholders’ unique information into the tool—such as the model and year of their vehicle, and location of the accident—the algorithm provides a line-item estimate of repair costs drivers can expect to be charged by nearby mechanics. It includes an assessment of the damage, the various parts needed to fix, the portion covered by the driver’s policy, and other items. It can even recommend specific mechanics in the area.

“The AI puts this together and authors an estimate,” Mr. Ramamurthy said. “It literally happens in seconds,” he said.

Mr. Ramamurthy said insurers and auto shops pay for the platform using a Software-as-a-Service model, sending a link to the tool to policyholders when they report an accident.

USAA is one of four national insurance carriers that started offering the service in the past few weeks, he said, adding that 300 more firms are expected to roll out the tool in the months ahead.

Githesh Ramamurthy, chairman and chief executive of CCC Intelligent Solutions.

Photo: CCC Intelligent Solutions Inc.

Based in San Antonio, USAA offers home, life and auto insurance to current and former military personnel and their families. It has more than 13 million customers and over $40 billion in net worth, according to the company.

Jim Syring, president of USAA’s property & casualty division, said it launched the tool in early October. It has since put well over a thousand claims through the tool, he said. “We will continue to learn and adjust to make it better each and every day,” Mr. Syring said.

Like other carriers, he said, USAA has deployed AI technology in different areas of the claims process: “This is the first time we are using AI-enabled software to process end-to-end auto insurance estimates,” he said, calling the new platform its first wholly touchless claims offering.

USAA is also working with Alphabet Inc.’s Google Cloud unit to develop a separate photo-based tool for other parts of its claims process, along with multiple tech partnerships, Mr. Syring said.

Across the industry, insurers are raising investments in AI, robotic systems and other forms of advanced automation, aiming to help claims adjusters provide faster and cheaper assessments of damaged properties.

Allstate Corp. has been in talks with state regulators to boost the use of vehicle-embedded devices and smartphone data to set policyholder rates by monitoring their driving habits, an approach known as telematics. Likewise, General Motors Co. last year launched its own car-insurance business with rates based on diver tracking technology built into its vehicles.

Beyond carriers, Apple Corp. is developing a crash-detection algorithm for iPhones and other mobile devices, using embedded sensors and 911 calls, which is expected to be released next year.

Write to Angus Loten at angus.loten@wsj.com