OCTOBER INSURTECH NEWSLETTER
Welcome!
For those who are new and don’t know me, I’m Andres, founder of InsurTech For Good, a consultancy providing analysis, regulatory, and policy advice to InsurTech companies, insurers, and regulators worldwide.
I curate this newsletter to deliver the latest insights on InsurTech regulations, policies, and business models, covering everything from AI to Open Insurance in the EU and beyond.
My passion is staying ahead of emerging trends and helping others do the same. I believe that sharing these insights can contribute directly or indirectly to better consumer outcomes, ultimately increasing innovation and trust in the insurance industry.
If you think your colleagues would also benefit from this newsletter, please share it within your network. If you have views on these topics, ideas for improving the newsletter, or think I can help you in other ways, please let me know by replying to this e-mail!
P.S. As a new addition, I’ve included a section at the end of the newsletter covering recent events and public consultations related to InsurTech and digital finance.
News and reports
OECD – FSB Roundtable on Artificial Intelligence (AI) in Finance: Summary of key findings
On 22 May 2024, OECD and the Financial Stability Board (FSB) held a roundtable with experts from the public and private sectors and with academics to analyse trends and use cases of artificial intelligence (AI) in finance.
Below there are 8 insurance-related findings from the Roundtable.
1. In insurance, predictive AI models were reported to be extensively used in underwriting, risk assessment, risk modelling, as well as claims management and handling across insurance lines.
2. The introduction of GenAI enables insurance companies to process better language-driven information, primarily in handling policies and claims.
3. The translation capabilities of AI models allow for efficient cross-country comparison of claims and policies.
4. LLMs also facilitate information retrieval for advice by agents from better informed systems and offer efficient and simplified communication for complex products (e.g. life insurance, pensions).
5. Nevertheless, human involvement remains essential in the process especially when interacting with clients.
6. In terms of materialised benefits, the use of AI tools in insurance was reported to offer operational efficiencies and better customer experience (e.g. faster claims processing).
7. AI offers a deeper understanding of insurance losses, allowing for better coverage of client needs including better pricing.
8. GenAI’s cross-language capabilities allow for analysis of information at a deeper level and at a cross-country level.
Read more here.
EIOPA's 2025 Annual Working Programme and InsurTech
EIOPA Single Programming Document sets out the activities the European Insurance and Occupational Pensions Authority (EIOPA) will undertake in the period 2025-2026. It includes the Annual Work Programme for 2025.
Below you can find 17 key initiatives outlined in EIOPA's 2025 Annual Working Programme to support the consumers, the market and the supervisory community through digital transformation.
1. Contribute to the Union Financial Data Strategy, in particular the Strategy on Supervisory Data.
2. Support the discussion of the Proposal for a Regulation on a Framework for FIDA, and work under any consequential mandates as relevant.
3. Follow up on the report from the EG on European Data Spaces and contribute to the establishment of EU Data Hubs.
4. Contribute to the implementation of the European Single Access Point (ESAP).
5. Support and monitor the implementation and supervision of the AIAct.
6. Deliver a regulatory framework on the use of AI by insurance market and support NCAs in its supervision.
7. Analyse and address AI cases via relevant tools which lead to unfair discriminatory practices and continuing monitoring the market.
8. Work in ethics group that may lead to supervisory / market guidance / development of new analytic tools to identify discriminatory outcomes.
9. Enhancing the cyber risk assessment in the insurance risk dashboard framework conducted within the context of improvement of methodological framework for identifying, assessing, mitigating and managing risks.
10. Thematic review on risks emerging from digitalisation – e.g., comparison websites.
11. Contribute to the European Forum for Innovation Facilitators (EFIF), and contributing to the Digital Finance Platform and contribution to other EU-wide and international fora, including the EU FinTech Lab and the IAIS FinTech Forum.
12. Monitoring of digital market innovations in a structured and efficient way.
13. Monitoring of distributed ledger technology (DLT) / Blockchain, focusing on Decentralised Finance developments in insurance and link to MICA
14. Monitor the use of crypto assets in the insurance and pension sectors and support the implementation of MICA, and issuing opinions at the request of NCAs as relevant.
15. Discuss the prudential treatment under Solvency 2 of the crypto-assets and impact on supervision of Prudent Person Principle and Prudent Person Rule supervision.
16. Continue to monitor possible regulatory barriers impacting innovation, and continued assessment of the effectiveness of actions already taken in view of the Commission Fintech Action Plan and as a follow-up of the ESAs Report on the CfA on Digital Finance.
17. Work on SupTech.
Read more here.
Fitness Check on EU consumer law on digital fairness
This Digital Fairness Fitness Check will impact the future of digital consumer protection in Europe, including for insurance and financial services, as it will be high on the Commission's agenda in the upcoming mandate.
Take some time to review it. For your convenience, here are some key findings (and, as I mentioned, this is important for the financial and insurance sectors!):
The report found that consumers do not always feel fully in control of their online experience due to practices such as:
- Dark patterns in online interfaces that can unfairly influence decisions, for example, by placing unnecessary pressure on consumers through false urgency claims.
- Addictive design of digital services that pushes consumers to keep using the service or spending more money, such as gambling-like features in video games.
- Personalised targeting that takes advantage of consumers' vulnerabilities, such as displaying targeted advertising that exploits personal problems, financial challenges, or negative mental states.
- Difficulties in managing digital subscriptions, for instance, when companies make it excessively hard to unsubscribe.
- Problematic commercial practices by social media influencers.
Read more here.
Quantum computing in financial services
Quantum computing in financial services seems to get a lot of attention recently.
First, G7 Cyber Expert Group strongly encourages financial authorities and institutions to begin taking the following steps to build resilience against quantum computing risks:
1. Develop a better understanding of the issue, the risks involved, and strategies for mitigating those risks.
2. Assess quantum computing risks in their areas of responsibility.
3. Develop a plan for mitigating quantum computing risks.
Read more here.
Second, the Bank for International Settlements (BIS) also published a paper covering quantum computing and the financial system and related opportunities and risks.
Read more here.
From supervisory perspective you might recall that in February Monetary Authority of Singapore (MAS) published advisory that outlined cyber security risks arising from developments in quantum computing. It also highlights mitigating measures that financial institutions should consider.
Read more here.
Parametric insurance and financial resilience
This Generali Global Corporate & Commercial and the United Nations Development Programme Insurance and Risk Finance Facility (IRFF) paper explains how parametric insurance can support the financial resilience of the most vulnerable communities around the world.
The aim of this work is to create a roadmap for organizations and governments interested in adopting this type of policy as part of their sustainability efforts and looking for ways to measure its impact.
It also makes recommendations on how governments, organisations, and insurers can work together to create the kind of ecosystem necessary to support the growth of parametric insurance as a tool to protect vulnerable communities.
The report also highlights how parametric insurance can help governments, financial institutions, businesses and households increase productivity and incentivise investments that are necessary for a sustainable future.
Read more here.
Open finance in the EU and US
Open finance could bring fundamental transformation to financial services.
According to this report it will:
- create new revenue streams through data monetisation.
- create holistic advice and management solutions.
- expand insurance distribution markets.
- herald a universally instant economy.
Read more here.
In the meantime, US Consumer Financial Protection Bureau (CFPB) finalized a rule that will give consumers greater rights, privacy, and security over their personal financial data.
The rule requires financial institutions, credit card issuers, and other financial providers to unlock an individual’s personal financial data and transfer it to another provider at the consumer’s request for free.
Consumers will be able to more easily switch to providers with superior rates and services.
By fueling competition and consumer choice, the rule will help lower prices on loans and improve customer service across payments, credit, and banking markets.
Pensions and insurance data is not included in the scope as far as I understand but I think there might be some spillovers to insurance innovation as well.
Read more here.
Generative AI in the insurance industry
Three key takeaways from IBM's report on Generative AI in insurance.
1. Insurers are chalking up early wins using generative AI in customer experiences, but there is more to do.
2. Customers want advice and products that match their risks, not just a better chatbot experience.
3. Organizations choosing less-centralized operating models to develop genAI capabilities improve business outcomes by up to 14%.
Read more here.
Global top 10 emerging risks in 2024 according to the AXA Future Risks Report
1. Climate change
2. Geopolitical instability
3. Cyber security risks
4. Risks related to AI and big data
5. Social tensions and movements
6. Natural resources and biodiversity risks
7. Energy risks
8. New security threats and terrorism
9. Pandemics and infectious diseases
10. Financial stability risk
Read more here.
Comparison of Regulatory Framework for Non-Discriminatory AI Usage in Insurance
A comparison of regulatory frameworks for non-discriminatory AI usage in insurance across the U.S., EU, Canada, and China highlights shared themes like transparency, traceability, governance, risk management, testing, documentation, and accountability.
Key differences stem from regulatory philosophies (e.g., the U.S.’s federalist model of state-led regulation vs. China’s centralized model), legislative focus (sector-specific vs. cross-industry), and priorities (rights protection vs. fostering innovation).
Note that since August, regulations may have changed given the rapid developments in this area.
Read more here.
Cross-border data portability through open finance interoperability
How to reduce friction and costs in global finance by enabling seamless cross-border data portability?
The Bank for International Settlements (BIS) is launching Project Aperta that aims to connect the domestic Open Finance infrastructures of different jurisdictions.
The initial use case to be explored is in trade finance for small and medium-sized enterprises (SMEs), with many more applications to follow.
Around 70 jurisdictions currently regulate open finance through various approaches. These open finance ecosystems often operate with differing domestic standards and protocols, preventing the smooth flow of data across borders.
Aperta will provide an innovative mechanism for global interoperability, offering harmonised features, functionalities, use cases, security protocols, operating procedures and trust frameworks for open finance across jurisdictions.
In its current phase, the participating jurisdictions include the United Arab Emirates, the United Kingdom, Brazil and Hong Kong SAR.
The participants have varying approaches to open finance – ranging from regulatory-led to hybrid to market-led.
Much-needed work, and I believe the findings could also offer valuable insights and lessons for the EU Financial Data Access Regulation (FIDA), where the proposal includes pan-EU schemes. However, we already have varying national standards in place.
Read more here.
The Global Insurance Watchdog IAIS sets strategic direction for 2025-2029
Five key activities in the Global Insurance Watchdog IAIS 2025-2029 strategic plan for adapting to rising digital innovation in insurance.
1. Continue to monitor and assess new and emerging trends in the area of digital innovation and cyber, and their impact on insurance markets.
2. Review existing IAIS material (ICPs and ComFrame), to ensure that effective supervisory requirements with respect to the risks stemming from digital innovation and cyber are adequately captured in global standards.
3. Align and collaborate with other SSBs on interconnected work in relation to digital innovation and cyber.
4. Evaluate the suite of supporting materials (and services) the IAIS can provide to members to support the application of IAIS material.
5. In collaboration with partners, enhance capacity building activities and training opportunities for IAIS members, including related to how digital innovation can improve supervisory practices (SupTech).
Read more here.
Unlocking Marketing Maturity in Insurance
This paper examines the implications of marketing strategies for insurance companies and the role of new technology in these strategies.
By prioritizing investments in digital marketing and technology, insurance companies can achieve greater market penetration, improve customer engagement, and drive growth.
Read more here.
World Life Insurance Report 2025
The future of life insurance is so interesting area to follow. There is so much room for innovation.
This World life insurance Report 2025 suggests how life insurers can make innovative choices today to drive customer centricity in the future in ways that will resonate with key customer segments.
It highlights that the key is to offer adaptability, flexibility in coverage, and an array of personalized policy types and engagement channels.
Read more here.
Hong Kong’s Policy Statement on Responsible AI Application in the Financial Market
6 key points from Hong Kong’s new Policy Statement on Responsible AI Application in the Financial Market:
1. The Government recognizes that the application of AI in the financial services sector has three key attributes, namely data-driven, double-edged, and dynamic. It will adopt a dual-track approach to promote development of AI adoption by the financial services sector, while at the same time addressing the potential challenges.
2. Financial institutions should formulate an AI governance strategy to provide direction on how AI systems should be implemented and used. A risk-based approach should be adopted in the procurement, use and management of AI systems and human oversight will be crucial to mitigating the potential risks.
3. The Hong Kong University of Science and Technology will make its self-developed AI model and its computing resources available to Hong Kong's financial services industry, and offer advisory and training services for on-premises deployment or API and Web Interface options.
4. To keep pace with the latest developments of AI and international practice, such as the emergence of explainable AI, financial regulators will continuously review and update the existing regulations and/or guidelines as appropriate.
5. On public education, the Investor and Financial Education Council will raise public awareness and enhance understanding on the opportunities and risks presented by AI technology in terms of retail investing and financial management.
6. Current AI application in insurance sector in Hong Kong: strengthening risk assessment capabilities through AI applications; an industry-wide Insurance Fraud Prevention Claims Database to leverage on AI data analytics to assist in detecting and preventing insurance fraud.
Read more here.
Global Finance & Technology Network
The Monetary Authority of Singapore (MAS) announced the establishment of the Global Finance & Technology Network (GFTN) to harness technology and foster innovation through global partnerships for more efficient, resilient, and inclusive financial ecosystems.
GFTN will aim to enhance global connectivity for impactful innovation in financial services internationally and strengthen Singapore's position as a global FinTech hub. It will build on the success of Elevandi, a not-for-profit company set up by MAS in 2021 to organise and globalise the Singapore FinTech Festival (SFF), which has grown to become the largest FinTech event of its kind in the world attracting some 65,000 participants from 150 countries.
GFTN will have four strategic businesses:
- GFTN Forums - a global conference convenor dedicated to finance and technology.
- GFTN Advisory - a knowledge centre offering practitioner-led advisory services and research on innovation policies and ecosystems.
- GFTN Platforms - a digital platform service provider for businesses, especially small and medium enterprises.
- GFTN Capital - an investment fund for technology start-ups that have the potential for sustained growth and positive social impact.
Read more here.
Financial Data Sharing Schemes under the EU FIDA proposal
Free Insurance Data Initiative (FRIDA) has published a white paper on Financial Data Sharing Schemes. It describes the future role of data exchange in the insurance industry within the framework of the Framework for Financial Data Access (FIDA), highlighting the potential challenges and the need for cooperation.
Read more here.
InsurTech/Digital Finance events and public consultations
Want to reach 3,300+ industry experts and decision-makers?
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Note that I reserve the right to select only events that provide value to readers and align with my values.
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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