DECEMBER | Open Insurance | Open Pensions | Open Finance | | GenAI in Finance | Innovation Facilitators | Catastrophe Data Hub |

Welcome to the December edition of my personal monthly newsletter on InsurTech regulation and policy!

My aim with this newsletter is to keep you up to date with the latest developments in InsurTech regulation and policy in the EU and beyond.

However please note that the views expressed in this newsletter are exclusively my own and should not be considered as representing the views/policies of the EIOPA with which I′m affiliated.

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#InsurTech #FinTech #insurance #innovation #AI #ArtificialIntelligence #OpenInsurance #OpenFinance #GenAI

This OECD paper examines the potential role of emerging technologies and innovation in enhancing risk assessment and encouraging policyholder risk reduction.

It gives an overview of potential applications of new technologies to risk assessment and risk reduction.

Furthermore, it includes an assessment of potential challenges to technology adoption (including regulatory challenges).

Finally, a set of potential good practices for creating an enabling environment that supports the use of technology in risk assessment and encouraging risk reduction is provided.

Read more here.

The International Association of Insurance Supervisors (IAIS) has issued a short summary of its ongoing efforts in the area of the adoption of AI/ML in the insurance sector.

The IAIS FinTech Forum has conducted a thematic review of existing guidance on AI/ML and model risk management (MRM) from 12 supervisory authorities and international organisations.

This review aims to facilitate the exchange of supervisory practices and experiences, particularly in addressing potentially new or heightened risks associated with AI/ML.

Key findings of the thematic review are outlined in the short public summary.

The IAIS will begin the development of an application paper on AI/ML in 2024.

In developing the application paper, the IAIS will engage with stakeholders for input and expertise on AI/ML use cases.

Read more here.

This report identifies a number of benefits and challenges relating to the operation and design of on innovation facilitators (hubs and sandboxes) and presents some recommendations for enhancement.

To further improve the operation of innovation facilitators and to enhance the experience for participating firms, national supervisors are invited to:

• improve their understanding of the concerns and interests of participating firms;
• broaden the scope of innovations captured, including at the cross-sectoral level;
• ensure an effective collaboration among NCAs;
• continuously evaluate the functioning of innovation hubs and regulatory sandboxes.

European Supervisory Authorities (ESAs) can provide recommendations for future EU-wide initiatives that focus on experimentation. To improve the functioning of this framework the ESAs should:

• re-evaluate the procedural framework for cross-border testing established by the EFIF in 2021
• formalise the EFIF’s process to raise co-legislators’ attention to issues identified via innovation hubs or regulatory sandboxes.

Finally, the ESAs propose that the European Commission undertake a comprehensive reflection on the EU-wide strategy to support financial innovation and the operation of innovation facilitators, in particular regulatory sandboxes.

Read more here.

Press release states that collaboration to share pension-related data will make it easier and more affordable for companies to develop relevant digital pension services. These pension services will give people greater insight into their pensions and help them make better decisions about the future.

Read more here.

This report captures insights from leaders and innovators in the early stages of Generative AI adoption in finance.

It focuses on real applications and visionary developments discussed during the roundtable at Singapore Fintech Festival 2023.

Read more here.

EIOPA launched a Catastrophe Data Hub. The Hub is an open-source collection of catastrophe risk data at European level. It will be valuable source of information for supervisors, insurance sector, policy makers and academia.

Read more here.

IIF-EY annual survey report on AI/ML use in financial services has published.

Key findings on regulatory and supervisory engagement, governance and ethics are following:

1) Global regulatory focus continues to be on explainability and bias.

2) 53% of respondents have already engaged regulators/supervisors in

the application of AI/ML techniques, and an additional 33% plan to do so

within the next year.

3) 66% of respondents have a C-suite manager of AI/ML governance

currently or are in the process of designating one.

4) 63% of respondents have an executive committee focused on AI/ML

governance or are in the process of defining or aligning one.

The rest of the report includes findings on generative AI and AI use cases as well as AI/ML third party use.

Read more here.

This OECD paper presents recent AI evolutions in finance and potential risks.

It also discusses whether policy makers may need to reinforce policies and strengthen protection against these risks.

Read more here.

The European Parliament's Economic and Monetary Affairs Committee (ECON) has published a draft report on open finance framework (FIDA proposal).

Read more here.

The report explores what is open finance and how it can benefit different stakeholders and economy.

From consumer perspective the report highlights three priority areas.

These are access to credit, retirement savings and pensions, and switching between financial products.

In early 2024 the Coalition will publish a strategy for the roll-out of Open Finance in the UK.

Read more here.

This report focuses on the platformization phenomenon in the financial services sector.

It analyzes emerging trends, envisions future platform archetypes, and assesses the conditions necessary for their success.

The focus includes stakeholder roles, competitive dynamics, and both internal and external factors shaping the evolving landscape.

Finally, it looks key themes such as data policy, the development of new digital business models, and the rise of multisector super-apps in certain geographies.

Read more here.