October 1, 2020

BMW Group and Swiss Re Develop New Automotive Insurance Concept

BMW and Swiss RE have partnered up on an insurance concept that reflects the impact of new technologies on the auto industry
BMW and Swiss RE have partnered up on an insurance concept that reflects the impact of new technologies on the auto industry

The BMW Group and Swiss Re, one of the world’s largest reinsurance companies, are working together to develop a vehicle-specific insurance rating that can be used to calculate car insurance premiums. The company says that the assessment system takes integration of safety-relevant driver assistance systems into account.

BMW says that as autonomous driving becomes ever closer to reality, more and more safety-relevant driver assistance systems are finding their way into BMW Group vehicles. In some cases, these actively intervene in vehicle control and increase vehicle safety. However, safety-relevant driver assistance systems are currently only considered to a limited extent in calculating insurance premiums. Auto insurance ratings are generally based on criteria such as the driver’s age or a vehicle’s horsepower. This will now open up new possibilities for customers and primary insurers.

BMW and Swiss Re have developed an algorithm that is capable of representing the complex effects of driver assistance systems on the safety of BMW vehicles as a score. This score facilitates calculation of an individual vehicle-specific insurance premium.

“At the BMW Group, we are always focused on the customer. For this reason, we have developed a solution, together with Swiss Re, that will enable primary insurers to calculate premiums based on an individual assessment of a vehicle’s technical features,” said Thomas Wittig, head of BMW Group Financial Services. “Our customers will benefit twice: from the added safety and convenience of intelligent assistance systems and from a possible reduction in their insurance payments.”

“The automotive landscape is changing and we at Swiss Re want to drive innovation in the motor insurance sector. We are delighted that the BMW Group has chosen to be our partner,” added Moses Ojeisekhoba, Chief Executive Officer Reinsurance, Swiss Re. “To continually assess all individual OEM’s safety features and their effect on accident frequencies and severities is difficult and burdensome for insurers. By combining our strengths, we have jointly developed the ADAS Risk Score, which will assist in the risk assessment of increasingly automated vehicles and help our clients develop their product suite.”