How Zurich Insurance went from pilot to project with AI, IoT and...

How Zurich Insurance went from pilot to project with AI, IoT and AR

How Zurich Insurance when from pilot to project with AI, IoT and AR
How Zurich Insurance when from pilot to project with AI, IoT and AR

Monika Schulze, global head of marketing at Zurich Insurance, discusses AI, augmented reality and the challenges of innovating in a conservative industry.

Tell us about any Zurich Insurance projects with IoT, AI and augmented reality. What was involved? Why did you invest and what technology did you use?

In 2015, Zurich Insurance kicked-off an inter-functional strategic project team in Silicon Valley, which spent several weeks discussing the Internet of Things (IoT) during visits with companies such as Google, LinkedIn, IBM Watson and many others. The outcome of this initiative was a vision of the future customer value chain, backed by insights and new technologies.

Since then, pilots such as augmented reality (AR) applications for our risk engineers and an artificial intelligence (AI) project for claims have been initiated with very good initial results.

Related: Insurance: With ‘connected policies’, who owns IoT data?

How long did it take to implement these solutions and what benefits has Zurich Insurance seen?

Our key principle for all projects is to reduce time-to-market through pilots and then scale when successful.

For example, our objective when implementing an insurance claims AI pilot in the UK was to improve injury claims efficiency through cognitive automation. By adopting this solution, our claims capability was transformed significantly, reducing costs in our claims processing, as well as achieving big improvements in the customer experience and claims-processing consistency.

To give you a better sense of how this helped the company, we went from 58 minutes to 5 seconds per medical report; we achieved a significant reduction in leakage through standardized decision-making; and we went from depending on employee availability to 24/7 availability.

In the case of AR, we wanted to increase the efficiency of our risk engineers in the field, so we tested this technology extensively.

AR is quickly becoming an important technology in the enterprise, acting as a bridge between the digital world and the physical world. For professionals such as field engineers and technicians, who often need to work hands-free and access data at the same time, it is still difficult to deploy digital technology that doesn’t interrupt their workflow.

Related: O2 drives down motor insurance premiums with latest IoT offering

Take the example of risk engineers and field inspectors: with smart glasses, they can now access checklists and site plans, capture work progress in real-time, and consult with remote experts, without having to hold any device as they climb ladders and operate in tight spaces.

At Zurich, we built a business case around efficiency and labor safety, which was signed off by the board. AR glasses provide a clear advantage over tablets, for example, as they offer hands-free operation, multiple screens of rich content and remote expert collaboration on-site. Consequently, AR glasses significantly improve labor productivity for our risk engineers, and the time taken to do on-site data and rich content inspections is cut by between 60 percent and 80 percent. Our first indications of cost reductions estimate that these initial improvements could result in savings of between $35 million and $52 million.

Were there any challenges during implementation?

Technology is going to become an important driver of organizational performance in the years to come. It is essential for companies to understand and adopt key technologies, get  people on board and set clear priorities in an environment that is quickly changing.

Data and information are now created at an accelerated rate, outstripping the ability of humans to keep up. On the one hand, we recognize the potential opened up by AI and we are fascinated by the idea of delegating to robots. On the other hand, we also fear that machines might take over. This is also the case in our company. The human element is important when implementing new technologies.

Insurance companies are not generally recognized for being innovative. This is a conservative industry and slow to change. The biggest challenge for all innovation projects is to speed up time-to-market and to adapt to quickly changing customer needs. The same holds true for AR projects.

On top of that, many colleagues still don’t know what AR is, or how it’s different from VR and mixed reality. It is therefore important to highlight the business benefits and let people try the glasses, so they can experience the advantages it can bring to their everyday working lives. We tested our AR concept with risk engineers on the ground and got quite positive feedback, including the first indications we needed to build a business case.

Related: 10 leading partnerships driving IoT adoption in insurance

With AR, most people have not yet had their ‘Aha’ moment. The gateway to the world of AR is the glasses, but today, these wearables are still very bulky and the optical performance of most smart glasses needs improvement. However, the weight, size, and power requirements of smart glasses can be expected to continue to improve quickly. I expect that we will see, over the next two to three years, a significant improvement in performance and cost of smart glasses. This, in turn, will allow us to use the application on a broader scale.

The biggest challenge for an organization such as ours is prioritizing our investments and increasing our speed to market.

How does Zurich Insurance plan to take these projects forward? What’s next with IoT?

It is important to learn from our experiences in the field and continuously improve and enrich the platforms we build. AR and AI are just two examples that Zurich Insurance is exploring. There are many others as well. The key to success is to ‘think big and start small’, so that we have an innovation pipeline in place and can then prioritize.

Related: Lost jobs but happier customers — insurance embraces AI and IoT