How the insurance industry changes - Part 3
Open Insurance – A Starting Point for Interoperability
Open Insurance is a relatively new concept in the market. So far, such concepts have only been used in the finance and banking sectors to facilitate data sharing and access to third-party data, such as Payment Services Directive 2 (PSD2).
In the European Union (EU), the focus has been on antitrust law considerations (to promote innovation and competition) and the principle that personal data belongs to the data subject. This also applies to Open Insurance now and flows into regulations issued by regulatory bodies like EIOPA (https://www.eiopa.europa.eu/browse/digitalisation-and-financial-innovation/open-insurance_en). In other jurisdictions, developments are more market-led. Open Insurance/Finance concepts are often developed and built upon new business models and private initiatives, driven by market participants such as insurers, software vendors, or system integrators.
In general, Open Insurance goes back to the idea of providing standardized Application Programming Interfaces (APIs) to enable better (self-)services to policyholders and/or create greater market competition. Besides the challenge of harmonizing different approaches and concepts already in place and provided by certain market participants, Open Insurance brings major advantages to all stakeholders.
The Free Insurance Data Initiative in Germany and Switzerland (FRIDA - https://freeinsurancedata.de/en/) brings several stakeholders together and creates and supports market-like standards in terms of API definitions for selected use cases (e.g. for car accidents or pension).
Solution Architect & Senior Expert Insurance at SAP - In early Retirement
1yOpen insurance will promote and demand standardized semantics for structured data. This will require a much more varied differentiation than in banking, particularly due to the differences between countries, insurance lines, product types and business processes. In addition, even more different players need to be involved in the exchange of data than in banking, which can be illustrated by practically every claim or benefit case. In order to "distil" the similarities and commonalities across countries and lines of insurance business, I am convinced that AI can help enormously - so that APIs can be provided more easily and quickly, which are best established on the market by themselves.