5 questions about the dos and don'ts of open insurance

The Global Federation of Insurance Associations (GFIA) has created six dos and don'ts for open insurance. Why? Who are they for? And what does open insurance actually mean? The Dutch Association director Geeke Feiter is chairman of the Disruptive Technology working group of the GFIA. She answers 5 questions.

1. Why did you, together with the GFIA, dive into the world of open insurance ?

"When I became chairman of the Disruptive Technology working group, we simply started at the beginning. With an analysis of technological developments and concepts that can be disruptive for the insurance sector. We made a heat map and it turned out that open insurance can have a lot of influence on the sector in the short term. Among other things, we looked at open banking, in which, in short, external parties get access to the data that customers' banks have. What happens if that is copied one-on-one to insurers? This analysis has taught us that it is better to look at the elements that are now specifically important in a data sharing system for insurers, than to adopt such a system for banking data. An insurance contract is very different from a checking account. Moreover, we would like to prevent what happened in Brazil. There, insurers are more or less forced to share their data, while their customers were not waiting for it at all. I don't think you should start at all if it doesn't help the customer."

What is and does the GFIA do?
The Global Federation of Insurance Associations (GFIA) consists of forty national and regional insurance associations. The federation represents the interests of insurers and reinsurers in 67 countries. Together, they account for 89 percent of the global premium volume, a total of about four trillion dollars. The GFIA is based in Switzerland and has a secretariat in Brussels. The organization was founded in 2012. The Dutch Association of Insurers has been a member since its inception.

2. Is that the most important do: it has to be in the interest of the customer?

"I always say that the most important do of an innovation is the purpose , but in practice you obviously have to look carefully at who benefits from sharing data. It should always be about the customer. By the way, you shouldn't make our dos and don'ts bigger than they are. We wanted to reach out. The dos and don'ts are a starting point for insurance associations and their (national) supervisors. One of the most important dos, besides the purpose, is that there should be a level playing field. I understand very well that a regulator or legislator considers it important that insurers deal with their customers in the right way, but why shouldn't that apply to other parties?"

Geeke Feiter (Photography: Ivar Pel)

3. Was it difficult to get everyone on the same page in such an international company?

"It has not been an easy process, but that makes perfect sense. All markets are at a different stage of digitization. Some are horrified by the idea that this may be coming at them, while others see the potential of it. Then it starts with looking for the definition of open insurance. I see that as sharing data, both inside and outside the sector. For example, with distribution partners. But always with the aim of creating value for the customer. Open insurance isn't just about insurance data either. Data from vehicles or smart sensors also fall under the definition. An insurer may be able to use your data from your energy consumption to create new value. Provided that you are at the helm and decide what can and cannot happen to your data."

4. Internationally, there was not yet much arranged to give open insurance hands and feet. Isn't that crazy?

"Yes and no. In practice, open insurance has been taking place here for a long time. For example, in the chain of the claims sector. Outside the chain, we like to look internationally at Australia and New Zealand. Especially in Australia, there is more reasoning based on opportunities. How can new value be created for the customer? Which sectors should you connect? The customer has full control there. This approach is completely different from Brazil, where data sharing is unilaterally imposed on the insurance sector. And that is precisely where the most important key lies. The supervisor/legislator and the sector will have to give hands and feet to the rules of the game together. We have now tried to draw up international dos and don'ts, but these are mainly intended to give direction to that discussion. In Europe, data sharing has been a topic of discussion for some time. For example, a proposal for open finance will be presented this summer. Then we can also look more broadly at the sharing of data in Europe."

5. And now? What's next?

"First of all, we will share our dos and don'ts with relevant parties within and outside Europe, such as we can enter into discussions with the IAIS (International Association of Insurance Supervisors). And in the meantime, we are already looking ahead to the next topic on our heatmap: artificial intelligence and machine learning. We would also like to learn from each other on these subjects. To have a good sense of what technology is coming at us. But we also want to know how regulations are handled in different parts of the world. And finally, we would like to be able to position the insurance industry in the driver's seat to create lasting value for the customer. And all this in a rapidly changing world."