“The Car Speaks to the Insurance Company”

Com­pre­hen­sive car insur­ance pays out in the event of dam­age, destruc­tion, or loss of the vehi­cle. When cus­tomers report a claim, a time-con­sum­ing and per­son­nel-inten­sive process begins for their insur­ance com­pa­ny. In addi­tion to gen­er­al claims pro­cess­ing, it often involves legal exper­tise and expert opin­ions. This takes time, is expen­sive, and squeezes prof­it mar­gins in com­pre­hen­sive insur­ance. Horst Nuss­baumer intends to change that—by using arti­fi­cial intel­li­gence and data analy­sis in claims pro­cess­ing. And it starts right from the very first sec­ond. “Now the car speaks direct­ly to the insur­ance com­pa­ny,” says the chief oper­at­ing offi­cer and head of claims, IT & oper­a­tions at Zurich Group Ger­many. Nussbaumer’s con­cept revers­es the tra­di­tion­al process, because in the event of a claim, the cus­tomer no longer has to con­tact the insur­ance com­pa­ny. Instead, at the moment the dam­age occurs, the car auto­mat­i­cal­ly reports it to the com­pa­ny and feeds the com­put­ers with data from the event. The insur­er then instant­ly con­tacts the dri­ver to pro­vide assis­tance, for exam­ple with a tow­ing ser­vice, a near­by work­shop, and a replace­ment car. It may sound like sci­ence fic­tion, but ini­tial tri­als are already underway.

Nuss­baumer has recent­ly been tri­al­ing a small fleet in ordi­nary road traf­fic. He says, “Mod­ern cars already send a wealth of data, but there aren’t enough users who can do some­thing with it.” The tech­ni­cal pre­req­ui­sites are already pret­ty much there thanks to built-in sen­sors and elec­tron­ic net­work inte­gra­tion in the vehi­cles. The “Zurich Call” builds on this. The aim is for the vehi­cle to auto­mat­i­cal­ly reg­is­ter an acci­dent and report all the rel­e­vant data direct­ly to the insur­ance com­pa­ny. The sen­sors in the car, mobile tele­pho­ny, and satel­lite nav­i­ga­tion pro­vide the tech­ni­cal basis. Airbag deploy­ment is one of the sig­nals that would cause the acci­dent to be report­ed to the insur­ance com­pa­ny, but dri­vers can also trig­ger the noti­fi­ca­tion man­u­al­ly by press­ing a button—for exam­ple, in the event of minor damage.

A high­ly moti­vat­ed, inter­dis­ci­pli­nary team is work­ing on prac­ti­cal imple­men­ta­tion at Zurich. “When cars start­ed talk­ing to each other, we saw new oppor­tu­ni­ties,” recalls Horst Nuss­baumer, who has been push­ing the idea for­ward for around five years now. The first task was to take the flood of data that vehi­cles pro­vide and iden­ti­fy the infor­ma­tion that is rel­e­vant for car insur­ance. But that was not enough, because pat­terns had to be rec­og­nized: which com­po­nents in each type of vehi­cle are most like­ly to be dam­aged in typ­i­cal rear-end col­li­sions? How much dam­age occurs on aver­age when a car hits a con­crete bol­lard while parking?

Now it was a mat­ter of ana­lyz­ing the data. Ordi­nar­i­ly, Zurich would have had to accu­mu­late new exper­tise to do this. “But why build it up our­selves when the knowl­edge and skills already exist else­where in the mar­ket?” says Nuss­baumer, who specif­i­cal­ly focus­es on core com­pe­ten­cies as an insur­er. And so he brought a team from man­age­ment con­sul­tan­cy Porsche Con­sult­ing on board. Since the begin­ning of 2021, the Porsche experts have been work­ing as guides to this ter­rain, which was pre­vi­ous­ly quite unknown to insur­ance com­pa­nies. Just one year later, the insur­ance company’s in-house project team at the Zurich Cam­pus in Cologne now has all the skills and knowledge—as well as the assis­tance of arti­fi­cial intelligence—to cor­rect­ly inter­pret and process the rel­e­vant data for han­dling and set­tling claims and con­vert it into tan­gi­ble ser­vices for the customer.

Even so, Zurich still regards tech­no­log­i­cal tools as a way to improve ser­vices, rather than as a sub­sti­tute for per­son­al atten­tion: “Our top pri­or­i­ty is to be close to peo­ple, to our pol­i­cy­hold­ers,” says Nuss­baumer. “That’s why we will never let machines work alone when it comes to dia­logue with our cus­tomers in the event of a claim.”

Cus­tomers must be able to trust their insur­ers to han­dle their data with care. The dig­i­tal infor­ma­tion on acci­dent dam­age that the vehi­cle sen­sors sup­ply belongs nei­ther to the insur­ance com­pa­ny nor to the car man­u­fac­tur­er. It belongs sole­ly to the per­son behind the wheel. This means the dri­ver must con­sent to its use. If they have done so, they can be offered imme­di­ate assis­tance in the event of an acci­dent. This means the insur­ance com­pa­ny is right by their side. “This is impor­tant to us,” empha­sizes Horst Nussbaumer.

Faster, simpler, fully digital

How Zurich will pro­vide imme­di­ate help in the event of accidents

The insur­ance com­pa­ny also finds out the nature and extent of the dam­age much ear­li­er than before thanks to the data that is trans­mit­ted direct­ly and auto­mat­i­cal­ly. This includes infor­ma­tion that allows an ini­tial esti­mate of repair costs. “This means we can process claims more effi­cient­ly and also at a much lower cost,” says Nuss­baumer. Speed often saves money, and this not only ben­e­fits the insur­ance com­pa­ny. Cus­tomers also ben­e­fit, and so do all the part­ners in the net­work, such as car man­u­fac­tur­ers with their autho­rized work­shops as well as com­pa­nies pro­vid­ing tow trucks or replace­ment rental cars.

“Pro­vid­ing the best pos­si­ble cus­tomer expe­ri­ence in the dig­i­tal pro­cess­ing of com­pre­hen­sive insur­ance claims is a joint task for part­ners act­ing in har­mo­ny with our val­ues and expec­ta­tions. If this suc­ceeds, every­one involved prof­its,” says Nuss­baumer. He says that an “orches­tra of vehi­cles and asso­ci­at­ed ser­vices” is com­ing togeth­er. Zurich has set itself the goal of becom­ing the leader in the claims sec­tor. “But we don’t want to always be the con­duc­tor,” says Nuss­baumer. “Insur­ers gen­er­al­ly can’t put them­selves at the cen­ter of ecosystems.”

Com­plex inno­va­tions also require patience and per­se­ver­ance. Devel­op­ing a per­fect­ly func­tion­ing dig­i­tal sys­tem for claims pro­cess­ing is, he says, a long, fre­quent­ly chang­ing process: “a jour­ney, not a sprint.” Nuss­baumer then con­tin­ues, “To achieve this, we and the other part­ners involved must learn, and must take things step by step.” The goal, he says, is to obtain excel­lent data, to achieve rapid pro­cess­ing and set­tle­ment, and to stay close to the cus­tomer through­out the process, from the acci­dent to the con­clu­sion of the claim. “The result of all that is what makes the dif­fer­ence in qual­i­ty,” Nuss­baumer stresses.

The prod­uct of motor vehi­cle insur­ance itself is large­ly inter­change­able, he says. Now the job is to find the tar­get groups that are open to the new, dig­i­tal­ized process. And the empha­sis is on groups, because address­ing every car insur­ance cus­tomer indi­vid­u­al­ly would “not be very effec­tive.” This is why Zurich is focus­ing on offers as part of a wide range of value-added ser­vices pro­vid­ed by the deal­er when a new car is pur­chased or leased. Three years of ser­vice includ­ed? Mobil­i­ty guar­an­tee? Dig­i­tal claims set­tle­ment as well? To make sure the offers are linked at the begin­ning of the con­trac­tu­al rela­tion­ships, Zurich wants to close­ly involve the auto­mo­bile man­u­fac­tur­ers in its con­cept. Once that is done, the next step, accord­ing to the COO, is to bring all the other insur­ers to the table: “If we work togeth­er as an indus­try, we will quick­ly achieve the nec­es­sary stan­dard­iza­tion in dig­i­tal com­pre­hen­sive claims set­tle­ment.” Nuss­baumer makes this appeal: “The auto­mo­tive and insur­ance indus­tries should step on the gas togeth­er now.”