New business models for the connected industry Munich Re and Bosch agree partnership
- First IoT partnership between technology company and reinsurer
- Connection, financing and risk management from a single
- Joint product development with industrial clients
Berlin / Munich. Munich Re and the technology and service company Bosch set to develop new business ideas in Industry 4.0. Representatives of the two companies signed a cooperation agreement on 22 February 2018 at the Bosch ConnectedWorld conference. The aim of this cooperation is to develop new packages of solutions for connected manufacturing. The two companies are combining their respective strengths: Bosch in hardware, software and services, Munich Re in risk and capital management. This holistic approach will make it possible for manufacturing companies to implement connected projects along the entire value chain while keeping risks at a manageable level and applying innovative financial instruments.
Easing clients’ worries about the financial risks
Dr. Stefan Hartung, Bosch board member responsible for manufacturing coordination and thus also Industry 4.0, explains: “Too many companies still shy away from becoming involved with connected production because they are concerned about the financial risks. We aim to solve this problem. Bosch and Munich Re will develop intelligent solutions that make it easier for clients to get into connected production.” Torsten Jeworrek, member of Munich Re’s Board of Management: “We are delighted that, in Bosch, one of the world’s leaders in technology, we have found our first strategic partner with whom we will develop new business ideas for manufacturing companies. By combining technology, risk management and financial instruments, we will offer added value to clients keen to make use of the opportunities provided by Industry 4.0.”
Holistic approach to connected industry
The manufacturing industry has to react in increasingly flexible ways to market demands that are evolving at an ever-increasing pace. With a view to optimising production in terms of quality, time and costs, many companies are considering connecting up their manufacturing processes. In order to do so, they need either new equipment or IoT-retrofit solutions so that machines can talk to each other and link up to the company’s IT. However, the challenges faced by small and medium-sized enterprises when it comes to implementation and financing are not insignificant. This is where Bosch and Munich Re come in. Clients receive not only well-founded advice on all areas of their connection project together with the relevant software tools and services; from the very beginning they also receive support and advice concerning financing and how to make the most efficient use of their production data.
Defining risk-mitigation models
Bosch and Munich Re are currently working together with clients to draw up specific solution packages in the first pilot projects. The specific needs of the clients are identified during joint workshops and on-site discussions, and implementation steps and financial concepts are set out. Specifically, the idea is to filter out exactly the right machinery and production data required to conduct an in-depth analysis and, ultimately, optimise production. This way, more precise information can be ascertained about maintenance needs for example, and new risk-mitigation models defined. To this end, Bosch and Munich Re provide sensor-based loss-prevention measures and innovative financial instruments for risk transfer. Munich Re’s extensive loss database and know-how in data analysis support the holistic risk-management approach. This enables Bosch and Munich Re to significantly reduce operative and investment risks and facilitates implementation of Industry 4.0 solutions.
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Munich Re stands for exceptional solution-based expertise, consistent risk management, financial stability and client proximity. This is how Munich Re creates value for clients, shareholders and staff. In the financial year 2017, the Group – which combines primary insurance and reinsurance under one roof – achieved a profit of €0.4bn. It operates in all lines of insurance, with over 42,000 employees throughout the world. With premium income of around €32bn from reinsurance alone, it is one of the world’s leading reinsurers. Especially when clients require solutions for complex risks, Munich Re is a much sought-after risk carrier. Its primary insurance operations are concentrated mainly in ERGO, one of the leading insurance groups in Germany and Europe. ERGO is represented in over 30 countries worldwide and offers a comprehensive range of insurances, provision products and services. In 2017, ERGO posted premium income of €17.5bn. Munich Re’s global investments (excluding insurance-related investments) amounting to €218bn are managed by MEAG, which also makes its competence available to private and institutional investors outside the Group.
The Bosch Group is a leading global supplier of technology and services. It employs roughly 400,500 associates worldwide (as of December 31, 2017). According to preliminary figures, the company generated sales of €78bn in 2017. Its operations are divided into four business sectors: Mobility Solutions, Industrial Technology, Consumer Goods, and Energy and Building Technology. As a leading IoT company, Bosch offers innovative solutions for smart homes, smart cities, connected mobility, and connected industry. It uses its expertise in sensor technology, software, and services, as well as its own IoT cloud, to offer its customers connected, cross-domain solutions from a single source. The Bosch Group’s strategic objective is to create solutions for a connected life, and to improve quality of life worldwide with products and services that are innovative and spark enthusiasm. In short, Bosch creates technology that is “Invented for life.” In short, Bosch creates technology that is “Invented for life”. The Bosch Group comprises Robert Bosch GmbH and its roughly 440 subsidiaries and regional companies in some 60 countries. Including sales and service partners, Bosch’s global manufacturing, engineering, and sales network covers nearly every country in the world. The basis for the company’s future growth is its innovative strength. At 125 locations across the globe, Bosch employs 62,500 associates in research and development.