The encyclopedia · Finance & Accounting · Financial decision · 2015–2018
Zurich mined BI claims to rethink business-interruption risk
Zurich and ETH Zurich analyzed business-interruption claims and found loss share rising over 15 years with industry-driven differences.
Zurich Insurance
the move
Business interruption insurance covers the losses a firm suffers when its value chain is disrupted, but insurers had little published evidence about what BI claims actually look like. Zurich Insurance collaborated with ETH Zurich to mine its own claims data across regions and industries.
The analysis showed that the average share of BI losses had increased significantly over the previous 15 years, and that BI risk exposure, recovery time and increased working costs differ materially by industry.
Rather than treating claims as a cost ledger, Zurich used the patterns to build targeted risk assessment for BI exposures and to design tailored supply-chain risk management and risk transfer products along the value chain.
why it works
- Insurers sit on the largest dataset of their own risk, but claims files are rarely mined for product design.
- Industry-level differences mean one pricing model for all businesses misprices the risk.
- The rising share of BI losses over 15 years signaled a structural shift worth pricing into products.
- Analyzing the 400 largest losses revealed the tail that ordinary averages hide.
what transfers
Claims data is a product-development asset, not just a cost record.
what came after
The project produced empirically grounded insights for targeted BI risk assessment and for developing tailored supply-chain risk management and risk-transfer practices. It was published in Interfaces as an example of insurance companies leveraging their own claims data for product and underwriting decisions.
references
- Zurich Insurance Uses Data Analytics to Leverage the BI Insurance Proposition
- Zurich Insurance Uses Data Analytics to Leverage the BI Insurance Proposition
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