HUK-COBURG: Innovation and Change in the Automotive Insurance Market using Artificial Intelligence (AI) and Telematics
The automotive insurance market is undergoing changes, in particular the development and adoption of new digital technologies (InsureTech). The traditional forms of insurance are being augmented or replaced by behavioural insurance that uses telematics and Artificial Intelligence (AI) to analyse and interpret the wealth of data generated from car driving behaviour. This case study discusses the changes and innovations in HUK-COBURG’s operations and business model, including risk profiling, evaluation of driver behaviour, data analytics, ethical considerations of behavioural insurance, the business case for telematics and HUK’s implementation philosophy for new technology and AI. The main conclusions are that incumbent insurance firms must respond to new competitors, market changes and AI technology by embracing digital transformation and developing new forms of insurance that exploit big data and AI capabilities. Our analysis outlines the implementation challenges and the range of new skills required to implement digital and organisational changes.