NOVEMBER INSURTECH NEWSLETTER
Welcome!
Welcome to all new members! Our community has grown to 3,300 readers!
For those who don’t know me, I’m Andres, founder of InsurTech For Good—a consultancy and knowledge hub—and this is my monthly InsurTech newsletter.
November has been a busy month in the world of InsurTech and innovation! This overview highlights key topics like open finance/insurance, AI, and some developments in life insurance (e.g., around genetic data).
Quick updates from me:
- Website Refresh: I’ve added an “About Me” section outlining my experience and how we can work together. It’s a work in progress, so feedback is welcome! If you need help with regulatory strategy, InsurTech research, thought leadership, or policy advisory, feel free to reach out on LinkedIn or via email.
- New Blog Launch: My first articles are live! Explore topics like computable contracts, consumer-friendly choice architecture in insurance, and EU Digital Identity Wallet implications. This space is for deeper dives—when a LinkedIn post is too short but an academic paper feels like overkill.
Upcoming Events:
- Cambridge SupTech Week 2024 (online): I’ll discuss how SupTech is transforming insurance supervision at this global virtual gathering of financial supervision experts.
- Digital Insurance MENA 2024 (Dubai): I’ll join a panel on fostering innovation for digital insurance transformation. I still have a few meeting slots open, so let me know if you’re attending and want to connect.
P.S. Please share this newsletter with colleagues who might benefit from it! I’d also love your feedback on how to improve—what topics you’d like more of, or anything else.
Now, on to the news!
News and reports
Governance arrangements in the face of AI innovation
Australian finance watchdog ASIC reviewed how insurers and other financial services providers are using and planning to use AI.
The review looked at how they are identifying and mitigating associated consumer risks, and their governance arrangements.
This report outlines the key findings from that review.
Read more here.
Responsible AI: what it is and why it matters for Life & Health insurers
What is responsible AI and why does it matter for life & health insurers?
This two-pager introduces the topic.
Additionally, I would add that from the EU perspective, it is crucial that the AI Act adopts a risk-based approach, classifying AI systems into different risk categories: unacceptable risk, high risk, limited risk, and minimal risk.
In the insurance sector, the AI Act designates AI systems used for risk assessment and pricing related to individuals in life and health insurance as high-risk.
The AI Act establishes a comprehensive set of requirements that providers and users of high-risk AI systems will need to comply with.
Read more here.
Global InsurTech Report by Gallagher Re
The 2024 series of Global InsurTech Report by Gallagher Re will examine the role of Artificial Intelligence in insurance.
The third report for Q3 is out now and will focus on "central business operations" which includes back-office process functionality, tax processing, policy administration and other operational processes.
Read more here.
Inclusive Insurance in Advanced Economies
Certain segments of the population are disproportionately exposed to financial risk, and inclusive insurance aims to protect these groups.
Policymakers and regulators are increasingly exploring inclusive insurance as a means to extend protection to underserved populations.
Challenges are related to availability, accessibility, affordability, and awareness and these create barriers to inclusive insurance.
Key strategies for unlocking inclusive insurance include:
- Developing relevant insurance products
- Collaborating with the public sector
- Facilitating access to insurance
- Promoting financial literacy
- Fostering trust
This paper is not only relevant for regulators and policymakers. It also offers valuable insights for innovators, as I think innovation plays a critical role in addressing these challenges.
In my opinion, this is essential reading, particularly as it focuses on advanced economies and examines the unique needs of Generation Z. These aspects are often underrepresented in research.
Furthermore, I believe the role of insurance in promoting financial inclusion deserves greater attention.
Read more here.
UK regulatory framework for pensions dashboard service firms
One use case of Open Finance is the development of pension dashboards, which, if well-designed and supported by a robust regulatory framework, can offer significant consumer benefits, including reducing the protection gap.
Pension dashboards are secure digital interfaces that allow consumers to locate their pensions and access basic information about them in one place.
The primary goal is to provide a clear overview of accrued entitlements and projected retirement income from all possible pension sources in a simple, meaningful format.
These dashboards can be structured as public, private, or a combination of both.
In the UK, the Financial Conduct Authority (FCA) is now consulting on a regulatory framework for private pension dashboard service providers.
This framework emphasizes an appropriate level of consumer protection and expects firms to act fairly, honestly, and professionally, with consumers’ best interests in mind.
The rules aim to ensure that pension dashboard services are fit for purpose, empowering consumers to make informed choices.
Read more here.
Genetic testing in the Life & Health insurance industry
The use of genetic information has been a topic of discussion in the life and health insurance industry for over two decades.
Traditionally, insurers have not required applicants to undergo genetic testing.
However, recent years have seen a shift toward stricter regulations across various markets, increasingly limiting insurers’ access to and use of existing genetic test data for insurance purposes.
This publication provides a comprehensive summary of regulatory approaches and recent legislative updates in major insurance markets regarding genetic testing.
It also examines industry views on adverse selection in life and critical illness insurance, highlights the ongoing role of family medical history in underwriting, and discusses additional risk factors relevant to life and health insurers.
Read more here.
EIOPA Feedback Statement on open insurance exploratory use case
One of my latest legacies from my EIOPA days has now published (although my former colleagues have formalized its final sign-off and publication).
This is the feedback statement on the discussion paper on Open Insurance: an exploratory use case in the insurance sector, which summarizes feedback from various stakeholders.
Open Insurance journey began with one of my early two-pagers years ago, and involved a significant amount of blue-sky thinking and multi-stakeholder engagement.
Today, this has culminated in the Financial Data Access (FiDA) Regulation proposal now under discussion.
I genuinely believe this initiative has the potential to drive real change and address some of the structural challenges within the insurance and finance sectors.
I´m grateful to have had the freedom to lead this effort at EIOPA.
Read more here.
The Financial Stability Implications of Artificial Intelligence
The rapid rise of AI in finance means authorities must close information gaps, update policy frameworks, and strengthen regulatory capabilities, according to the Financial Stability Board.
And many jurisdictions and regulatory authorities are already making progress in these areas of course.
This report examines the financial stability implications of artificial intelligence and refers also to implications for insurance.
Read more here.
World Cloud Report - Financial Services 2025
Banks and insurers worldwide are embracing cloud technologies as part of their digital transformation, aiming to drive growth in an increasingly complex market.
However, challenges like inefficient cost management and rapid application scaling have hindered many financial services firms from maximizing the benefits of their cloud investments.
The World Cloud Report – Financial Services 2025 by Capgemini draws insights from 600 financial services leaders in banking and insurance, 120 senior FinTech and InsurTech executives, and over 20 interviews with cloud experts across 13 global markets.
It reveals that only 12% of financial institutions are true cloud innovators, using advanced platforms, ecosystems, and strategies to achieve growth.
For others seeking success, the report recommends steps such as adopting appropriate cloud platforms, fostering collaboration through cloud-driven innovation, and leveraging data analytics for better customer engagement and product innovation.
Read more here.
IAIS draft Application Paper on the supervision of artificial intelligence
The global insurance watchdog, IAIS, has launched a public consultation on the draft Application Paper on the supervision of artificial intelligence.
The application paper covers four broad sections:
1. Governance and accountability: this includes the need to integrate AI into risk management systems, provide human oversight of AI risks and considerations around the use of third parties.
2. Robustness, safety and security: this considers issues related to the robustness, safety and security of AI systems.
3. Transparency and explainability: this section sets out the need for AI outcomes to be explainable and tailored to the need of different stakeholders.
4. Fairness, ethics and redress: this section includes the need for fairness by design, monitoring of outcomes and adequate redress mechanisms. It also highlights the need for supervisors and insurers to consider the broad societal impacts of granular risk pricing on the principle of risk pooling.
Read more here.
The Global State of Open Banking and Open Finance Report
A significant knowledge gap exists in truly understanding the implementation of Open Finance frameworks and their effectiveness.
These frameworks involve complex, multi-dimensional issues spanning various fields, including technology, infrastructure, regulation, supervision, law, and governance.
This report examines the diverse regulatory and operational landscape of open banking and open finance across 95 jurisdictions.
It provides a comprehensive analysis of governance practices, highlights factors driving convergence or divergence among frameworks, and draws lessons from diverse implementation strategies shaping the future of data sharing in financial services.
Read more here.
Key Considerations for Open Finance
10 key considerations for designing an inclusive open finance framework that reaches and benefits underserved populations.
1. Objectives – Define the desirable policy objectives and how open finance will contribute to them.
2. Process leadership – Recognize the key role of public authorities as well as the need for collaboration.
3. Governance – Set up effective, transparent, and inclusive governance arrangements.
4. Regulation – Implement risk-based and proportionate regulation that clearly determines the rules for customer-permissioned data access.
5. Oversight and supervision – Guarantee provision of the necessary enforcement powers and resources for oversight of the ecosystem, as well as proportionate supervision of all participants.
6. Consumer protection and data protection – Ensure a robust consumer protection and data protection framework is in place.
7. Consumer information and awareness – Facilitate consumers’ awareness and understanding of open finance opportunities and risks.
8. Participation – Enable broad participation of financial services providers.
9. Technical infrastructure and architecture – Encourage the use of standardized application programming interfaces (APIs) and a common architecture.
10. Pricing – Monitor and influence pricing to support policy objectives. Pricing can impact development and adoption of open finance products and services.
Read more here.
Artificial intelligence in UK financial services
15 key findings from the Bank of England and FCA’s latest survey on AI and machine learning in UK financial services.
1. 75% of firms are already using artificial intelligence (AI), with a further 10% planning to use AI over the next three years.
2. Foundation models form 17% of all AI use cases.
3. The insurance sector reported the highest percentage of firms currently using AI at 95%.
4. A third of all AI use cases are third-party implementations.
5. The top three third-party providers account for 73%, 44%, and 33% of all reported cloud, model, and data providers respectively.
6. Respondents report that 55% of all AI use cases have some degree of automated decision-making.
7. Only 2% of use cases have fully autonomous decision-making.
8. 62% of all AI use cases are rated low materiality by the firms that use them.
9. 46% of respondent firms reported having only ‘partial understanding’ of the AI technologies they use versus 34% of firms that said they have ‘complete understanding’.
10. The highest perceived current benefits are in data and analytical insights, anti-money laundering (AML) and combating fraud, and cybersecurity.
11. The risks that are expected to increase the most over the next three years are third party dependencies, model complexity, and embedded or ‘hidden’ models.
12. Cybersecurity is rated as the highest perceived systemic risk both currently and in three years.
13. The largest perceived regulatory constraint to the use of AI is data protection and privacy.
14. The largest perceived non-regulatory constraint is safety, security and robustness of AI models.
15. 84% of firms reported having an accountable person for their AI framework.
Read more here.
G20 policy note on financial well-being
A topic very close to my heart is financial health, or financial well-being, and particularly the role of digital solutions and infrastructure in supporting financial inclusion and promoting financial well-being.
Financial well-being, also referred to as financial health, has emerged as a key policy objective both nationally and internationally within the areas of financial inclusion, financial education, and financial consumer protection.
Over the past decade, there has been growing awareness among policymakers, the private sector, and development agencies of the importance of focusing on financial well-being as a core outcome for consumers.
This trend reflects a commitment to ensuring that policy initiatives positively impact individuals as they navigate their financial lives, make informed financial decisions, and interact with the financial system.
This note presents a consensual concept of financial well-being, including a preliminary conceptual framework and working definition, as well as an initial roadmap for developing a measurement framework.
The note aims to help identify financial sector policies and other factors that can positively influence financial well-being, while recognizing the role of broader economic and social factors.
Read more here.
Global Insurance Report 2025
Insurers face a volatile landscape marked by high inflation, uncertain interest rates, shaky consumer confidence, geopolitical instability, and shifting trade patterns.
However, these challenges present opportunities for innovation.
McKinsey’s Global Insurance Report 2025 highlights opportunities for the industry, offering detailed insights and actionable recommendations to help insurers enhance performance and capture profitable growth in this rapidly evolving environment.
Read more here.
Enhancing financial services with permissionless blockchains
This report explores how public permissionless blockchains can enhance traditional financial services.
It highlights key benefits of an open base layer, such as transparency, inclusivity, and increased competition.
It also addresses challenges like scalability, privacy, transaction sequencing, finality, and governance.
The paper emphasizes the need for interdisciplinary research, openness, and stakeholder dialogue to manage trade-offs and unlock the technology's full potential.
Read more here.
InsurTech/Digital Finance events and public consultations
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Note that I reserve the right to select only events that provide value to readers and align with my values.
IAIS Public consultation on draft Application Paper on the supervision of artificial intelligence
The IAIS is consulting on its draft Application Paper on the supervision of artificial intelligence. Comments due by Monday, 17 February 2025 24:00 CET.
Read more here.
European Commission launches consultation on AI Act prohibitions and AI system definition
The Commission’s Artificial Intelligence (AI) Office is launching a targeted stakeholders consultation process on the future guidelines on the AI system definition and the implementation of AI practices that pose unacceptable risks under the AI Act. Both areas are important for insurance sector.
Consultation is open until 11 December 2024.
Read more here.
The Data Act in contracts - Series of webinars organized by European Commission
Help European Commission to develop model contractual terms for data sharing and standard contractual clauses for switching between data processing services (cloud computing contracts) by sharing your opinion.
Read more here.
EIOPA consultation on technical advice on standard formula capital requirements for investments in crypto assets in insurance
EIOPA invites stakeholders to provide their feedback on the Consultation Paper by responding to the questions via the online survey no later than 16 January 2025.
Read more here.
Thank you!
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Andres
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