PriyaPatel
TLDR:
Key Points:
- Open insurance introduced in 2018 aims to integrate insurtechs into insurance processes via APIs.
- Benefits of open insurance include innovation, customer reach, and faster product development.
Key Elements of the Article: Who’s afraid of open insurance?
Legacy systems have hindered the progress of open insurance, but the benefits for insurers, brokers, and insurtechs are evident. The concept was introduced in a whitepaper in 2018 aiming to integrate insurtechs through APIs to promote innovation and interconnectedness.
Despite the advantages of open insurance, many incumbent insurers have mixed feelings about its implementation due to concerns about legacy technology migration, consumer awareness, trust, and lack of standardization. Regulatory and data issues also pose challenges.
An Arthur D Little report highlighted the importance of technology in making open insurance a reality, with insurtech startups playing a key role in utilizing data flows and digital ecosystems. Insurtechs can help unlock new customers, pricing, risk, and accelerate product development.
The transition to open insurance may face obstacles like GDPR requirements, but proponents believe in the potential for innovation and customer-centricity. Insurers and brokers are starting to show interest in open insurance models, recognizing the benefits of improved customer experience and broader partner ecosystems.
While open insurance represents a shift in the industry, its success hinges on regulation, tech infrastructure, and customer adoption. Insurtechs are seen as instrumental in driving the adoption of open insurance and unlocking the benefits it offers in a data-rich sector.
Overall, the concept of open insurance presents opportunities for insurers and brokers to enhance customer reach, improve operational efficiency, and foster innovation in the insurance industry.
