What is open insurance?

Open insurance enables information sharing within the insurance industry. It creates more digital and open relationships between insurance companies and their customers — relationships based on trust, understanding, and an enormous amount of data. It helps understand the needs of everyone involved, and will benefit both insurance providers and consumers. The win for providers is better insights about their insurance products, and the win for consumers is more enjoyable insurance experiences – it’s a win-win.

The background.

The PSD2 directive and open data transformed the entire financial industry, with open banking simplifying and streamlining processes and experiences, making consumers used to certain digital standards. What happened back then with open banking is now happening with open insurance. When you’re ready, we’re here to help.

The technology.

Open insurance is based on APIs, Application Programming Interfaces, which are sets of programming codes that allow for data transmission from one software product to another. APIs (such as the ones used in open banking) enable insurance companies to open their data sources and collect data from their consumers, competitors, and third parties.

The regulation.

In addition to already strictly following all GDPR and other data protection standards, clarifications on an open insurance framework are needed. Under an open insurance regulation, insurers would be legally required to develop standardized ways of sharing personal and non-personal insurance information with third parties - creating security for all parties involved.

Read more about our view on an open insurance framework in our responses to the European Commission’s consultation on "open finance framework and data sharing in the financial sector".

Creating win-win experiences.

For consumers.

Open insurance equals informed decisions at every step of the insurance journey, as well as frictionless switching and management features. Consumers can seamlessly share their current insurance information, get a transparent comparison to an alternative policy, and buy a new policy, all digitally after collecting all insurance policies in one digital overview.

For insurers.

Open insurance will lead to similar benefits to those that banks have seen from open banking: more streamlined products and consumer offers, tailored solutions for every customer, improved customer relationships, and increased innovation stemming from insights into what competitors are doing.

For banks.

Open insurance enables a holistic banking experience. With opportunities for new digital bancassurance products and the inclusion of insurance in personal finance offerings, banks can take a larger share of their customers’ financial ecosystem and deliver new engaging features to their customers – while increasing value for the bank.

Frequently asked questions.

Digital transformation has allowed companies in many business areas to move closer to the consumer. Open banking, for example, led to a multitude of new opportunities; fintechs, new payment solutions, more tailored consumer offers – the list is long.

For the insurance industry, this means a more digital and open relationship between the insurance companies and their customers. The relationship is based on trust, understanding, and an enormous amount of data. The European Insurance and Occupational Pensions Authority (EIOPA) defines open insurance as accessing and sharing insurance-related personal and non-personal data, usually via Application Programming Interfaces (APIs).

This means that open insurance is, in simple terms, an umbrella term for enabling information sharing within the insurance industry.

The insurance industry doesn’t need to change – but an update doesn’t hurt. Open insurance helps understand the needs of everyone involved, and will benefit both the insurance providers through more insights about their customers; and consumers through better insights about their insurance, better insurance products, and more enjoyable insurance experiences.

We dedicate ourselves to creating win-win solutions for the insurance industry — through the power of open insurance.

An API, Application Programming Interface, is a set of programming codes that allows for data transmission from one software product to another. It establishes a connection between a data provider and an end-user.

It can be compared to a user interface, which is a connection between a computer and a person, but an API connects computers or software applications to each other instead.

APIs (such as the ones used in open finance) will enable insurance companies to open their data sources and collect data from their consumers, competitors, and third parties. These types of digital ecosystems are what we talk about when we talk about open insurance.

Consumers today are used to having a world of information available at the click of a button. Open data, together with GDPR and other data protection standards, will enable them to make informed decisions at every stage of their insurance journey. They’ll know what kind of plan they have, what terms and conditions come with it, and how it compares to other insurance options on the market. In case of a potential future loss, it also creates a better understanding of how the consumer will be reimbursed.

For insurance companies, open insurance will lead to similar benefits to those that banks have seen from open banking.

Some of the benefits include more streamlined products and consumer offers, as well as tailored solutions for every customer and improved customer relationships.

The sharing of user and industry data provides an opportunity to future-proof new and old business models. In addition, knowing how competitors work and what they’re developing will increase innovation and promote business development.

Clarifications on an open insurance framework are needed. Legal uncertainty can be seen as a regulatory barrier, and it’s often not clear how certain services should be treated. Under an open insurance regulation, insurers would be legally required to develop standardized ways of sharing personal and non-personal insurance information with third parties - creating security for all parties involved.

By looking at the lessons learned from PSD2 and the open banking implementation, it’s evident that the insurance sector needs support and guidance from the national supervisory authorities (NCAs) to build and properly supervise the APIs.

Unfortunately, most NCAs today have not been initiating any specific measures related to open insurance. And therefore, it’s clear that the industry needs more regulatory support when APIs become more common in the insurance sector.

Insurance providers will most likely be required to set up an API that can share the required data points outlined in a legislation. Looking into what is discussed at the moment there will probably be a pre-enforcement implementation period if the legislation is passed.

Insurance providers currently don’t have user data for consumers or TTP. When the legislation is implemented consumers will be able to take bigger ownership of their own data. This will result in easier switching of insurance, efficient management of insurance and more independent consumers.

Our learnings from PSD2 were that many banks were afraid to be out-competed by new replaced but early adopters could be proactive and meet customers needs for digital services early. Companies who are starting to adapt their business based on consumer needs will be long-term winners.