In this series of articles I will explain how openness is revolutionising the Insurance market driven by a new plethora of applications and services which enhances user experience and, at the same time, enabling the rise of disruptive business models.
Although there is no uniform definition of open insurance, at this level, it will be considered as making insurance related data (both personal and non-personal) available to access, use and share between different insurance market players in order to create new services, apps and innovative business models.
In open models, value is created by opening up the organization and connecting the different players along the industry value chain under a different paradigm from the traditional insurance realm. This digital transformation enables competition from innovative and nimble rivals and is forcing (traditional) insurers to transform their business. In a recent survey conducted by KPMG, 85% of insurance CEOs said that the pandemic has accelerated their digitisation initiatives. Additionally supporting this, Accenture’s Disruptability Index identifies Open Insurance and Open Banking as two markets with disruption probability (see Figure 1).
This creates the opportunity for disruptive business models and product innovation.
In the short-term, the insurance industry needs to invest in developing open APIs, architecture and platforms that are key for success.
At bird’s sight, Open Insurance could broadly be looked from three interlinked angles (Figure 3):
From a technical perspective, the main concept of Open Insurance comes from the combination of APIs and insurance applications. Open APIs allow sharing data between different insurers, startups, banks, InsurTechs (insurance startups based on technology, inspired by the FinTech model) and other organizations.
Insurers need a strategy that will enable them to quickly build, publish, install and govern a large number of APIs. This strategy should address five key steps:
In the next post we will describe Open Insurance business models. Stay tuned!
“Good things come to those who don’t wait”, available at https://www.accenture.com/us-en/blogs/blogs-good-things-come-those-who-dont-wait and last accessed 09/22/2021.
“The Ultimate Guide to Open Insurance”, available at https://insuranceblog.accenture.com/the-ultimate-guide-to-open-insurance and last accessed 09/22/2021.
“Open Insurance: what is it and why is it so exciting”, available at https://www.lexology.com/library/detail.aspx?g=02822ec8-1b46-4d6e-8803-8f54f1337b7e and last accessed 09/22/2021.
“The COVID-19 catalyst: insurers race to digitize”, available at https://home.kpmg/xx/en/home/insights/2020/11/the-covid-19-catalyst-insurers-race-to-digitize.html and last accessed 09/22/2021.
“Open Insurance: accessing and sharing insurance-related data”, available at https://www.eiopa.europa.eu/sites/default/files/publications/consultations/open-insurance-discussion-paper-28-01-2021.pdf and last accessed 09/22/2021.