While open insurance has the potential to positively impact both consumers and insurers, the design of any potential framework will determine its overall impact. Further elaboration of the exact scope and objectives of such a framework is therefore necessary.
Promoting a data-driven financial sector is an important and valuable aim. For insurers, a greater availability of data could lead to improved risk monitoring and assessment, a better customer experience and increased fraud detection. Increased access to data generated by both public and private sectors could also provide the opportunity to increase innovation and competition in the insurance sector.
It is also vital that any framework takes account of insurers' business model, in particular the data they use. Policymakers must, for example, avoid applying a copy of the payment services framework (PSD2) to the insurance sector. The focus should instead be on:
- Learning from what has or has not worked under PSD2; and
- Ensuring any framework respects the features and complexities of the insurance sector.
- Consumers enjoy the same level of protection regardless of which company they are dealing with.
- A fair allocation of costs among the parties to ensure a balanced approach to the funding and development of any new infrastructure.
Source: Insurance Europe