AI-Driven Insurance Transforming Logistics Solutions

Q: How does the rebranding from Zuru LATAM reflect the company’s capabilities as the first digital ecosystem for protection and risk management in on-demand insurance for logistics? 

A: We rebranded to Zuru Logistics Insurtech to reflect our evolution. When we initially entered the Mexican and Peruvian markets, we focused primarily on distributing existing products from insurance companies. But as we grew, we recognized the need to enhance efficiency and address the unique challenges within the logistics sector. Instead of simply asking insurers what they want to offer, we now actively analyze market trends and identify specific problems logistics companies face. This proactive approach allows us to develop targeted solutions collaboratively with insurers.

We focus on SMEs, recognizing that logistics heavily relies on intermediaries. To better serve this segment, we have expanded our divisions to include transportation lines, freight agencies, and customs brokers. Our platform provides services that reach SMEs directly while leveraging intermediaries to enhance accessibility. This approach is driving increased adoption of digital insurance solutions among SMEs in Mexico.

Q: What opportunities have arisen following the company’s rebranding?

A: Following rebranding, we began to identify customer segments that were previously underserved in the insurance market. We focused on cross-border logistics and the unique risks involved in transporting goods from the United States to Mexico. We noticed that transportation lines often deviated from their routes due to safety concerns and lacked adequate solutions for protection.

By analyzing these challenges, we identified potential customer groups that fit well with our new product offer. Our goal is to address their specific needs and provide them with tailored insurance solutions that enhance their protection and support them in navigating the complexities of cross-border logistics.

Q: How are you using AI to tailor solutions to the unique needs of each client and the challenges they face, such as cargo theft?

A: Our partnership with AI27, which has significant experience in security and custody, allows us to leverage real data. It originally operated as a traditional security company and has gathered valuable insights regarding theft cases, including timing and risky routes. This data has enabled us to create an AI algorithm that predicts the probability of theft. This algorithm is continuously evolving as it incorporates data from various shipments, enhancing its sensitivity to trends in Mexican logistics, such as the routes being used and the value of goods entering and exiting the country.

We have also seen increased collaboration from insurers, which are beginning to share data to improve accuracy in risk scoring. This partnership fosters a more comprehensive and standardized data set, enabling us to tailor our products effectively for each client while addressing the unique challenges of different regions in Mexico. 

Q: What factors do you consider when customizing cargo insurance under Zuru Max, and how does this customization help the company meet the unique needs of each client? 

A: Our cargo insurance product Zuru Max was launched to provide maximum protection and security in the market. This product addresses two key issues. First, many customers faced fixed rates for insurance, regardless of whether they were transporting low-risk or high-risk goods. As a result, clients were often paying higher rates than necessary for their specific risk levels. Second, the requirement for additional security measures, such as custodial services, made insurance unaffordable for many clients, especially given the increasing costs associated with security in Mexico.

To solve these problems, we developed a three-part solution. We collaborated with AI27 to create a risk-scoring system that evaluates each shipment based on factors like origin, destination, cargo type, and value to determine the likelihood of theft. This scoring system categorizes risks as low, medium, or high, allowing us to offer three corresponding insurance rates: low, medium, and high. This approach democratizes access to insurance, enabling clients to pay lower rates for low-risk shipments while aligning costs with actual risk levels. We also introduced dynamic deductibles based on the risk score, moving away from the fixed deductibles common in the market. Furthermore, we incorporated AI-driven protection services, including digital monitoring and rapid response for recovering units in case of incidents.

For the first time in Mexico, clients can access a comprehensive cargo insurance solution that includes AI-powered risk assessment, digital custody, and recovery services in a single package. We also partnered with Chubb, the first insurer to trust our product’s structure, allowing clients to forego traditional custodial requirements and potentially save 30%-40% on insurance costs.

Q: What benefits and savings is Zuru Max generating for your clients?

A: The primary benefit is that we are no longer requiring clients to hire traditional security services, resulting in significant savings. Traditional security costs have been rising, making routes increasingly expensive for customers. Our product offers a highly competitive rate while providing comprehensive coverage.

More and more customers are relying on our product for high value shipments, including containers with a value of up to MX$10 million or US$500,000 per shipment. This change demonstrates the effectiveness of our offering and the savings customers can achieve by opting for our innovative solution.

Q: What challenges have you faced when implementing Zuru Max in Mexico?

A: The primary challenge is fostering collaboration among all parties involved in logistics. While a client can purchase our product, its effective implementation requires direct communication with their transportation providers and monitoring centers. We are aiming to create an integrated ecosystem that facilitates the adoption of the security protocols we want to establish for insurance, custody, and rapid response.

However, the high rates of theft in Mexico are driving clients to recognize the need for a shift away from traditional protocols toward a more structured approach. This presents an opportunity for us to lead the industry in implementing innovative solutions that enhance security and operational efficiency.

Q: How do your partnerships with Chubb and AI27 enhance your risk management capabilities? 

A: Our partnership with AI27 brings invaluable expertise in understanding the risks specific to the Mexican market, as the company is backed by 25 years of experience. Its advanced technology has allowed us to refine our risk-scoring system and enhance data accuracy, ensuring a seamless integration of our processes. Clients benefit from a unified experience where they do not differentiate between Zuru’s and AI27’s contributions; instead, they see a cohesive program that works efficiently together.

Chubb has been a pioneer in collaborating with insurtechs in Mexico, so our alliance has been pivotal. Chubb recognized the unique challenges we aim to address and trust our technological protocols and protective measures. Its approval represents a significant milestone for us and has prompted other insurers to consider similar collaborations. This shift could lead to innovative changes in how they design logistics insurance products, ultimately improving risk management across the industry.

Q: How are you educating and convincing traditional logistics players to adopt insurtech solutions like yours? 

A: Traditional logistics players recognize that risks need to be addressed; our role is to demonstrate how our technology can facilitate that change. It is essential for these companies to commit to the process we implement, which includes closely monitoring and supervising their transport lines to ensure the effectiveness of our solutions.

We have observed a shift in mindset, largely due to the high levels of risk associated with cargo theft in Mexico. Clients understand the necessity of enhancing their security measures. Since launching our product, we have successfully secured clients and sales, indicating a strong willingness among logistics providers to embrace these insurtech solutions for improved security.

Q: Which industries are showing more interest in your services in light of nearshoring?

A: We are receiving the highest demand for quotes and insurance from the industries most affected by theft: auto parts, groceries, and products containing precious metals like copper and aluminum. While nearshoring volumes were initially projected to be much higher, growth is still taking place. Many companies have been cautious with their investments, but the volume of goods moving in and out of Mexico remains significant and continues to increase.

Q: How will the landscape of logistics insurance evolve in the coming years, and what role will Zuru Logistics Insurtech play in its transformation? 

A: The logistics insurance landscape will increasingly shift toward product innovation. We initially operated solely as a distributor, but now we are actively developing new products. Insurers are recognizing the value of collaborating with insurtechs, rather than viewing us merely as competitors. Moving forward, we will focus on creating solutions tailored to emerging challenges not only in logistics but across various sectors. Zuru Logistics Insurtech aims to lead this transformation by addressing specific market needs and fostering partnerships that enhance overall risk management.

Q: What are your new goals for expansion and development, particularly in relation to nearshoring opportunities? 

A: In the short term, our goal is to expand coverage throughout Mexico, particularly with Zuru Max. We are exploring opportunities to open cross-border offices next year. Given the rising incidence of theft not only in Mexico but also in countries like Colombia and Central America, we recognize that not all goods can be transported by sea, necessitating land routes. Thus, our immediate focus is on expanding to key cities in Mexico, but we also plan to establish an office in Laredo, Texas, next year to support cross-border operations.

Zuru Logistics Insurtech, based in Peru, provides a digital platform for logistics insurance for SMEs. It also provides SaaS with embedded insurance for logistics operators and API integration for digital partners.