This digital transformation project aims to transform one of the world’s largest and most influential insurance companies – Zurich Insurance Group Ltd. Just like most of the insurance companies in the world, Zurich Insurance currently runs a traditional insurance business model with minor to medium levels of IT integration in their daily operations. What we are proposing is a new concept called ‘insurance personalization’ which could transform the way Zurich Insurance Group conducts its business. In detail, we propose a solution based on Internet of Things (IoT) technology for Zurich’s car and home insurance business.
We identified two major challenges Zurich is facing at the moment: (1) Consumer demand personalized insurance and (2) Entry barriers have been reduced and new entrants (i.e. startups) are entering the market.
About Zurich
Zurich Insurance Group has an annual revenue of 68 billion USD. They currently operate in over 170 countries with 55,000 employees and clients ranging from individuals, small medium enterprises to multinational corporations. Its current business segments include General Insurance, Global life, and farmers. In order to simplify the current business model of Zurich Insurance, we have broken it down into the following three components:
- Underwriting and investing – insurer select risks to be insured and value of premium to be charged
- Claim – claims are investigated by claim adjusters and often involves disputes and litigations
- Marketing
Solution
The proposed solution for Zurich’s car insurance business consists of two major components, (1) a driving assistant that monitors driver behavior and (2) a smart vehicle extension that transmits critical information about the condition and health of a car using sensor technology. There are three distinct ways in which Zurich will benefit from the proposed solution:
- Customers will have a more valuable experience with Zurich. So far, the only value customers usually extracted from the insurer was in case of claims, that is, when it was already too late and something severe happened. Applications such as the driver assistant or the smart vehicle extension will show the customer that Zurich is actively involved in protecting them before something happened. If, for example, the smart vehicle extension detects that a part of a car is about to break down, it can inform the insurer as well as the driver and appropriate measures can be taken to fix the part.
- The collected real-time and complex data will allow Zurich to fundamentally change their underwriting process. With the new IoT solution, Zurich is able to assess personal risks on an ongoing basis.
- Customers will interact with Zurich more frequently, creating a feeling of a more personal relationship with the company. Creating a more personal relationship is the key for Zurich to close the trust gap between them and their customers.
Recommendations
Based on our analysis, we have have the following recommendations for Zurich:
- Act proactively, not reactively – do not just blindly follow what is unfolding in their industry, it is the right time to innovate
- Partner up with startups
- Focus on the customer
- Reconfigure the business for change
~Group 69
