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Bridget Driscoll has gone down in history as the first person to be killed by a car. She was struck as she crossed the path of a vehicle giving demonstration rides in Crystal Palace in London in 1896. Although the car was moving only at 4 miles/hour (6.4 km/hour), she hesitated in front of it and, according to witnesses, seemed “bewildered” before being hit.
Bridget died of her injuries. Although the driver had been driving only three weeks and hadn’t been given instructions on which side of the road to drive on, the jury returned a verdict of “accidental death.” The coroner said he hoped such a thing “would never happen again.”
Few people back then would have imagined how the car would impact the world. There were only a handful of cars on the road at the time and Germany’s Emperor Wilhelm II, for one, said, "I believe in the horse. The automobile is only a passing phenomenon." Yet, by 1905, the Emperor had changed his mind and joined the Imperial Automobile Club (KAV), which organized motor races for wealthy men.
History does not record if the vehicle that struck Bridget was insured, but it is possible. Early cars often had coverage based on policies covering horse-drawn vehicles. The first car insurance policies were issued in the UK and the U.S. in 1898. Bridget’s death illustrated why automobile insurance – and regulations – would become increasingly important in the future.
In Germany then, there were just a few cars on the road, so deaths and injuries caused by automobiles were a small, but growing statistic. Far more people were being killed by horse-drawn vehicles and trains. In 1912, only 320 of the 2,917 deaths caused by vehicle collisions were attributed to cars. Some 1,114 were killed in accidents relating to railways, 1,006 by horse-drawn vehicles and 56 by bicycles.
But by the time Kaiser Wilhelm abdicated in 1918, the number of cars adorning German roads had risen to 60,000, along with 22,500 motorbikes. Understandably, the number of fatalities was rising. In Germany, insurance specifically for automobile accident, liability and collisions was first offered in 1899 by the Stuttgarter Verein (later taken over by Allianz).
Allianz was watching the developments in the growing market. The company had started insuring machines in 1900 and had insured bicycles before that, but as automobiles became more reliable and predictable with mass production, auto insurance offered a growth market. In April 1918, together with the KAC and Munich Re, Allianz formed Kraft Insurance, which quickly became the largest insurer in the German motor market. In 1919, premiums amounted to 2.5 million marks; in 1922 Kraft was fully incorporated into Allianz. By 1925, premiums hit 15 million marks and exceeded 29 million marks by 1930.
"Courage and foresight," are the attributes Christian Stadler, Professor of Strategic Management from Warwick Business School, believes are behind the success of Allianz in the market. In his book Enduring Success. What We Can Learn from the History of Outstanding Companies, he cites Allianz and the creation of car insurance as an example. "Other insurers were in the business too early," he writes, "Step by step, Allianz seized the opportunity when the time was right."
By the 1930s, the number of cars on European roads had risen to about 6 million, prompting governments to introduce compulsory third-party insurance – and licensing for drivers. Massachusetts in the U.S. had already introduced such a requirement in 1927 to make all parties financially responsible for accidents and other American states gradually followed suit.
The UK followed in 1930 with the Road Traffic Act and Germany in 1939. For auto insurers such as Allianz, compulsory third-party was a boom business, but it would sour in the late 1960s.
In the aftermath of the Second World War, Allianz saw its auto insurance business rebound quickly. Between 1949 and 1970, the number of cars on West Germany roads rose to 13 million from 370,000 – and all had to be insured. According to Allianz’s archival data, by 1970, about half of the company’s property insurance premiums were related to automobiles in some way.
During the years of the Wirtschaftswunder (economic miracle), the Volkswagen Beetle was the icon of reconstruction and dynamism and Allianz participated in – and benefited from – its rise. Working through Volkswagen dealers, Allianz pioneered selling insurance services to new car buyers so they would be fully covered as soon as they hit the road. For many customers, this was their first experience with insurance and this often opened new doors to more business for the company.
In 1970, the scene on German roads was carnage. Around 20,000 people died that year in collisions and accidents. In response, the German government introduced a 100 km/hour speed limit on country roads and, a year later, a maximum blood alcohol level of 0.8. The death toll has been on a decline ever since. For comparison, 3,214 people died in car crashes and traffic accidents in unified Germany in 2016, even though there are far more cars on the road.
In the early 1970s, the auto insurance industry also faced a crisis. The growing number of cars and accidents had thrown the equilibrium between income and expense out of kilter, leaving many automobile insurers running at a loss. For Allianz, both the number of accidents and the number and the amount of claims broke all records. Allianz lost 154 million marks in 1970 and total spending by all German insurers was 4.4 billion marks, of which 58 percent was for repair costs.
Allianz responded by creating a new unit within the Allianz Center for Technology (AZT) to research automotive damage. This institution was unique in Europe. The focus was on repair methods, research into the causes of damage, and traffic and operating safety, including researching safety measures such as the seatbelt and later the airbag and automatic immobilizer.
The unit quickly became an established partner for the auto industry and media for issues related to traffic safety. By 1974, recognition and adoption of the research into replacement parts and sectional repair by the AZT made vehicle repairs much less expensive. Tests and research the AZT has undertaken over the years include the influence of windshield design on the risk of injury, requirements for replacing seatbelts after accidents and development of child safety seats.
Today, there is a record 45.8 million cars on Germany’s roads and Allianz remains one of the largest insurers. Worldwide, the company offers motor insurance in 38 countries directly and in seven countries through partners. It’s preparing itself for the future of mobility - autonomous and electric cars.
"We expect car insurance to still be around in 50 years, so we will accompany and facilitate the automation of vehicles with our products," says Joachim Mueller, member of the board of Allianz Germany. “Regardless whether it is the driver or the technology that reacts incorrectly and causes an accident in the future, the existing liability system will protect the innocent road victim."
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