For many, understanding the benefits of Open Insurance, and an open innovation strategy, can be challenging in today’s world, especially given the measures that are currently being brought in and, consequently, are lacking many practical examples.
But when it comes to technological advances in general, we think about smart equipment that boosts productivity, and is able to efficiently identify and meet our needs.
In this article, you will find that this open universe for insurance companies is directly linked to the latest technologies and the experiences enhanced through them. You will also gain an understanding of this context within Open Finance.
To learn more about this new model that has been implemented in the insurance market, it is important to understand what Open Insurance is and its context.
Following the start of Open Banking, a new perspective ecosystem that used open data began to emerge, which was coined Open Finance. Its goal is to interconnect different commercial sectors, streamlining the communication and exchange of information between them and ultimately, delivering more secure and suitable offers to users.
Therefore, developing the insurance market within this reality became a game-changer for its evolution, as it promotes data security, democratisation of offers, lower prices and, above all, innovation.
We associate technological innovation with smart connections in various areas of society. And it is no different within Open Insurance. The digital experience is constantly evolving across all layers of the insurance market.
By sharing their information through APIs (Application Programming Interfaces) architectures, insurtechs and consolidated insurance corporations will be able, for example, to share data through a single application.
This ultimately facilitates access to information, as it ensures standardised processes and fluidity for the acquisition of information and creation of product offerings. Not to mention, of course, ease of use for customers.
The adoption of an Open architecture is also associated with major advancements in security and technology standards adopted by insurance companies, representing a huge advance in the level of IT architecture maturity and integration of channels as a whole.
The possibility of integration with Open Banking can also lead to multiple opportunities to enhance the products and services offered, ultimately leading to better monetisation possibilities.
And one of the key points is that insurance companies that deliver a more mature omnichannel experience, in compliance with Open Insurance, will also gain user preference, hence the importance of adopting a solid integration strategy.
Users will no longer have to check multiple platforms to pick the best offer; they will all be concentrated in a single place. But that’s not all APIs do. They provide increasingly complete digital experiences, as they enable connectivity to the latest smart devices in the market, integrating the platform of the insurance company with that of your car and your house, for example.
To clarify things a bit, let’s imagine a specific pre-Open Insurance scenario:
When you buy a new vehicle, the insurance consultant is often required to enter the buyer’s data manually into the system. It is only after this information has been processed that the consumer is able to access the contract, card and documents of the insurance policy. Due to the lengthy process of this format, the chances of leaving the dealership without insurance cover are far greater.
Now, in this same scenario, but with Open Insurance in effect, each customer’s data is readily available and they can communicate in real time with the insurer, making the whole process faster and more secure. In this scenario, the customer is already insured by the time he leaves the dealership.
That’s why APIs are crucial for the application of a new business model in Open Insurance. They enable a completely interconnected ecosystem that includes the insurer, the dealership and the customer.
It is important to note that in order for all this chain of logistics to be possible, the customer must consent for their data to be used. That is one of the basic premises of the regulations drawn up by SUSEP (Private Insurance Superintendence).
Now, technologies like the IoT (Internet of Things) take the digital experience to a whole new level, as integrating platforms and users can lead to other actions, such as voice-activated actions. Activating your home insurance through a voice command to an Artificial Intelligence, like Alexa, is now an accessible reality in this context.
Besides broadening the range of offerings and expediting processes, the promise of the benefit of Open Insurance is that it will make the insurance market more accessible, ultimately making it a more democratic, secure and technological sector.
If you’re excited about so many new experiences in the insurance market, share this article on your social media.