Jul 13, 2022
A session titled “Thriving in an open world”, moderated by independent consultant Tony Tarquini, was held on the second day of Insurance Innovators: Summer Festival 2022. This discussion focused more closely on the "open insurance" initiatives. Peter Godec, AdInsure Architect at Adacta, and Emma Kindblom, Digital Transformation Officer at Dina Försäkring, discussed how businesses have responded to innovation, and the future of insurance in the open API economy.
Tony Tarquini got the ball rolling by questioning the current path to open insurance. “We see a lot of initiatives related to open insurance now, from both insurance companies as well as the regulators such as EIOPA. Open insurance is about sharing services and sharing data. However, we have to follow the rules, and sharing of data will become increasingly regulated." Peter responded by adding: "On the other hand, consumers are ready and receptive to new technology and developments. People will let you access their data if you are trustworthy and the context is relevant to them."
Next, Tarquini asked: “How can the insurance sector become more innovative? Theory is one thing, but how does it apply in practice?”
Godec replied: “In the banking sector this has been the practice for quite some time, but in the insurance business we are at the beginning. Open banking and open insurance are related to the philosophy of ‘open innovation’. It is often the case that innovation comes from ‘outsiders’ rather than well-established organisations. Being open should accelerate innovation by lowering the barrier of entry for external collaborators. On the technology side, open APIs reduce the friction of collaboration. As an insurance company you have to have a very good story here – many of the innovators we see today are ‘connected specialists’. They have grown up in the internet age and they operate on a very technological level so if you are like a traditional insurer, you will have a hard time cooperating with these guys if you are not ready the technology level."
“It depends on the scale of the organization, the company, the ecosystem, and how we can integrate innovations closer to consumers,” said Emma Kindblom when describing how organizations have reacted to innovation. “Because it involves more than simply technology but also people, we view consumers as partners. Open insurance must be accepted as a third party in the process. All of us are still learning.” When asked how this would affect the relationships with clients, she responded: “You have a partner in traditional insurance that both loves and hates having a client come your way. Distribution is a topic that comes up frequently. You must keep in mind that we are an insurance company, and that claims may actually be the point of contact rather than distribution. Risk management is important, as is risk prevention and supporting business in making the right decisions. We must embrace openness and if you succeed, there is a tremendous opportunity for growth, particularly for a tiny challenger.”
Godec was then asked about the success tactics for the developing ecosystem and how open APIs contribute to success.
"I think agility is the key. When you look at all the embedded insurance use cases you can see that is important you can develop new products and product variants that target these very specific distribution channels. You need a technology platform that enables such agility and that's why we [Adacta] are here."
Tony asked: "So, do you think insurance companies need to throw away existing systems to achieve all of this?"
Peter answered: "I don't think so. You can add on to your existing architecture. The keyword here is micro services. This has become really easy today. You can experiment and start with small use cases, see if they bring you benefits and build on that."