Win-win insurance experiences and data-sharing - open insurance can be described in many words, but these two may indicate a more open future for insurance. With swift developments in the industry, different companies are already seeing real opportunities to become market leaders.
Up until today, consumers have had little to no insight in their insurance situation. With open insurance, they can empower their decisions based on data. Companies who are starting to adapt their business based on consumer needs will be long-term winners, and if they don’t evolve alongside market trends, they will lose employees, their reputation, and valuable customers.
According to a Harvard Business study, early adopters of new technology benefit in terms of better business outcomes, including revenue growth, greater profit margins, and a lead in market position. Given the new improvement of insurance experiences and products based on data, insurance companies who adapt now will soon benefit from doing so. The more adaptable an organization is, the more relevant and resilient it becomes in the market.
The journey has already begun.
As for open banking and the PSD2 directive, there’s a current investigation into the regulation of insurance data-sharing by the European Insurance and Occupational Pension Authority (EIOPA). In a discussion paper, the EIOPA highlights the benefits for consumers: transparency, reduced costs, and tailored products are some of them. In addition, factors such as facilitated innovation and increased mobility are emphasized for the whole industry.
Despite the fact that the EIOPA is yet to develop a complete set of rules for open insurance, it’s already possible to offer customers some of the benefits - and companies are starting to do just that. For example, with approval from the GDPR, insurers can allow their customers to share data and, in that way, gain access to flexible, transparent, and value-creating services.
Being early adopters of technology often opens up possibilities for building contacts and forming a tight inner circle that shares business advice, connections, and investors with each other. When a network is new, it is easier to connect with other members. Getting in with the right people creates exposure for the brand and establishes a launchpad for greater success.
Another important benefit of being an early adopter is to be part of the development process. Everything isn’t set in stone in the early stages, and often your feedback is very welcome. In this way, you’ll also develop into an early expert and thought leader within the new field - and get ahead of the competition by already being in the network as it becomes well-established.
The risks of being “too late”.
Companies with a heavy legacy or with a less innovative mindset risk being too late for the open insurance transition which has already begun, leading to higher risk of being bypassed by eager, more digital players with a consumer-first mindset. Companies who are able to process ideas swiftly and are ready to adapt, however, can more easily understand the benefits of using data to convert customers and gain vast market insights. They also have less to lose; they can take that advantage and use it to become market leaders.
By becoming an expert early, they gain popularity in the market and attract attention. Not just from consumers or other insurers, but also from companies who may have access to connections they want or technology they need. It also enables becoming the focal point and reference in future articles or case studies, giving free promotion and a boost to the brand.
Being an early adopter equals innovation. With risk comes reward; the early adoption of open insurance might just be your key to long-term success.