BrazilInsurers making inroads with open insurance data sharing models
In the footsteps of banking groups globally, insurance companies are increasingly embracing an ‘open data collaboration’ approach to underpin their services, operations and innovation. This is according to research from Innopay.
In the world of banking, ‘open banking’ has grown into a mainstream term. In short, open banking is a practice that enables stronger collaboration between banks and third-party financial service providers in the area of customer and financial data, with the aim of provides a more seamless and personalised service to clients, and enhance ecosystem effectiveness.
In similar vein, open insurance is no different, explains Maarten Bakker, a partner at Innopay: “Open insurance is about sharing and consuming volumes of structured data, products and services in digital ecosystems [through APIs]. Open insurance is thus an important building block for insurers to maintain future relevance for their customers and the creation of new business models.”
Innopay is an international consulting specialised in data strategy and data-driven innovation in among others the financial services industry. The firm has been tracking the open banking landscape for a few years, and has now expanded its research series to include a lens on insurance.
“Although several front-running insurers are already making inroads,” said Bakker, “most insurers are lagging behind banks.” To come to its findings, Innopay assessed the maturity of APIs and technical infrastructure of 100+ insurance companies, comparing these results with around 300 banks.
One key insight is that many insurers still have a long way to go in terms of opening up access to their insurance-related data, products and services. Beyond their strategy and governance toward data sharing, insurers also lag in technological knowhow. Banks are also more advanced in commercialising the open data-innovation spending, a key driver of investment.
According to Bakker, “it’s time for insurers to really start thinking about their strategies to open up their business, develop the necessary capabilities and create digital ecosystems,” if they want to “safeguard their business continuity and future relevance.”
Domains which could benefit most from open insurance in the short term include improving performance in direct sales and third-party channels, more effective underwriting through better risk calculations, a more streamlined onboarding process ramping up customer experience, and more efficient claims management across channels.
