MARCH | Open insurance | Gen AI in insurance | BigTech in insurance | Digital tools for health and wellness | Cyber Insurance | Digital Fairness

Welcome to the March 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 #BigTech #CyberInsurance #GenAI

Managing Artificial Intelligence-Specific Cybersecurity Risks in the Financial Services Sector

This just published report focuses on the current state of AI-related cyber security and fraud risks in financial services.

It includes an overview of current AI use cases, trends of threats and risks, best-practice recommendations, and challenges and opportunities.

Read more here.

Open Finance Can Reduce Financial Inclusion Gaps

This recent CGAP essay argues that data has the potential to be transformational for financial inclusion and open finance can be the key to unlocking it.

Read more here.

How the financial authorities can take advantage of artificial intelligence

Artificial intelligence will both be of considerable help to the financial authorities/supervisors but also bring new challenges.

This column argues that financial authorities risk irrelevance if they are reluctant and slow in engaging with AI.

It also discusses how the authorities might want to approach AI, where it can help, and what to watch out for.

Read more here.

Navigating Global Life and Health Insurance Demand Trends

Generational change and its impact to the future of insurance is something that I′m personally particularly interested. This recent report explores the behavioural factors influencing life and health insurance purchase among Gen Z and Millennials.

The findings are following:

1. Insurance Knowledge: Greater knowledge of insurance products is linked to a higher probability of being insured.
2. Marital Status: Married individuals show a stronger propensity to purchase life insurance compared to their single counterparts.
3. Working Status: Being employed or semi-employed is a strong predictor, with such individuals more likely to hold life insurance.
4. Residential Status: Owning property is associated with a higher likelihood of insurance coverage, indicating a link between asset ownership and the procurement of insurance.
5. Area Type: Residents of major cities are more likely to purchase insurance.
6. Age: An upward trend in life insurance purchases is observed with increasing age. In contrast, the likelihood of acquiring health insurance decreases with age.
7. Sex: Men are more likely to purchase life insurance, whereas women show a higher inclination toward health insurance.

The findings also highlight a major move towards using?digital methods to buy insurance.

Read more here.

Munich Re Tech Trend Radar 2024

The Tech Trend Radar provides information about technology-driven trends that are relevant to insurance companies in the global insurance sector.

The radar aims to sharpen awareness, provoke discussion and initiate new business opportunities that appeal to all insurance clients.

Read more here.

Digital tools for health and wellness in insurance

Digital innovations and technologies are providing tools for identifying and managing health and wellness-related risks and promoting health and wellness activities and better lifestyle choices.

These developments introduce a new dynamic into insurance. Many tools apply lessons from behavioural economics by seeking to influence policyholder behaviour and overcome short-term barriers to change.

These tools can offer a win-win: better health for policyholders and reduced claims for insurers.

This paper reviews the digital tools developed by the insurance industry to improve the health and wellness of policyholders.

The paper identifies practical use cases across the globe, highlights issues and challenges, such as data privacy and security, safety risks, data quality, overall effectiveness, and explains relevant policy and regulatory frameworks.

Read more here.

Open & Embedded Insurance Report 2024

Open & Embedded Insurance Observatory has published its 2024 report.

It includes interviews, case studies, views on upcoming regulation and other insights on embedded insurance.

P.S. Longer reading and registration is required for full access.

Read more here.

A Primer on Generative AI for Actuaries

This recent Society of Actuaries paper offers a technical overview of the mechanics of Generative AI and several actual examples.

It is intended to be a practical introduction to the concept, not a comprehensive view.

The papers states that actuaries should consider this a point-in-time view of this rapidly-evolving industry and use the issues presented in the paper to spark conversation within organizations and across the profession.

Read more here.

Digital Fairness for Consumers

BEUC - The European Consumer Organisation has published a report on Digital Fairness for Consumers.

The authors hope to initiate a broader discussion on what digital fairness might mean and how digital fairness can be anchored in the EU consumer law.

Read more here.

Strategy on supervisory data in EU financial services

European Commission has published progress report on the strategy on supervisory data in EU financial services.

The report states that the Commission is on track to rationalise supervisory reporting requirements in financial services and improve their overall consistency.

It also states that work should continue, starting with the finalisation of pending legislative proposals. The report includes dedicated initiatives in technology area:

1. Report and workshop assessing the feasibility of publishing supervisory reporting requirements in a machine readable and executable form.
2. Digital finance platform and data hub.
3. Pilot regime for market infrastructures based on DLT and pilot project on embedded supervision.
4. EU Supervisory Digital Finance Academy.
5. ESAs and other authorities testing and implementing supervisory technologies.

Read more here.

Derisking emerging technologies in financial services

This report argues that as financial institutions around the world race to keep pace with a rapidly evolving technology landscape, they should consider not only what benefits new emerging technologies offer but also what risks they introduce.

Read more here.

Using Synthetic Data in Financial Services

Recent FCA report provides an overview of the opportunities and risks with synthetic data. Synthetic data could contribute to beneficial and responsible innovation in financial services.

It is one of many privacy enhancing technologies that can expand and support data sharing. It has the potential to address important financial services public policy issues but there are still also open questions.

The report focuses on 3 key themes across the data lifecycle:

1. Data augmentation and bias mitigation system
2. Testing and model validation
3. Internal and external data sharing for fraud controls

Might be of interest to industry stakeholders, regulators and policymakers.

Read more here.

Bigtech finance, the EU’s growth model and global challenges

This report requested by the European Parliament ECON committee states that the provision of financial services by large digital conglomerates has considerable implications for the EU’s growth model and raises multiple regulatory concerns about financial stability; competition and market concentration; data protection; cybersecurity and operational resilience.

Bigtechs also have potential geostrategic implications because the largest digital platforms are headquartered outside the EU.

To address these global challenges, this study makes recommendations aimed at strengthening the regulation of Bigtech finance internationally and in the EU.

Read more here.