First Open Banking, now Open Insurance – it’s no longer possible without digital platforms

Digital Bancassurance, Open Banking, Financial Home… more and more trends are emerging in the market. And now comes the next buzzword: Open Insurance. But what does it mean? Is there already a directive similar to PSD2 for this? And who benefits from it? These and other questions will be answered in the following article.

How it all began…

Let’s rewind 1 year, 5 months, and 4 days. It’s September 14, 2019: The PSD2 directive comes into force and shakes up the banking industry. Third-party providers (including insurers) are now able to access their customers’ banking data, provided the customers agree to it. FinTechs, insurers, merchants, and others can now act as either a Payment Initiation Service Provider (PISP) or an Account Information Service Provider (AISP), for example, conducting account analyses and offering personalized offers to customers based on this data (Open Banking).

However, this was only a one-way street until now, meaning insurers could connect to banks via the PSD2 interface, but there was no uniform interface standard that allowed banks to access insurance data. But now, various companies in the insurance or InsurTech sector are pushing for a two-way street; meaning banks and other third-party providers should also have access to their customers’ insurance data, using a unified interface standard similar to PSD2 (Open Insurance).

Early Efforts in Open Insurance in Early 2020

The magic word on the path to a unified interface standard in the insurance sector is FRIDA (Free Insurance Data Initiative). FRIDA is an initiative launched by the platform provider Friendsurance and Insurlab Germany in January 2020.

It essentially includes 3 core points:

  1. Establishing new and existing interfaces
  2. Exchanging data according to high security standards
  3. Collaborating on creating a unified data structure

In the initial discussions, the focus was on how open interfaces should be organized so that insurance companies, brokers, and customers can all benefit from them. The main goal was and still is to establish interface standards before regulators like BaFin dictate them.

Beneficiaries include banks, customers, and insurance platforms

1.5 years ago, it was the banks who, due to PSD2, were forced to relinquish control over customer data to third parties. Now, with Open Insurance, opportunities arise for banks to advance their bancassurance models. Their experience with Open Banking provides a good foundation for leveraging a potential Open Insurance movement to their advantage.

According to a Bitkom survey, nearly 50% of Germans can imagine handling their insurance matters through their online banking. Customers are increasingly inclined to manage their financial affairs through a single app or digital platform, in the spirit of a “Financial Home.” For users, the top priority is quick handling of insurance matters while retaining sovereignty over their own data.

From a customer perspective, this is wonderful, but from an insurer’s perspective, it’s challenging, as the exclusivity in their own distribution is threatened by omnipresent comparison offers from third-party providers. At this point, insurers must rethink their product strategy.

Open insurance platforms are not possible without JDC, Friendsurance & Co.

From the points mentioned, it is evident that insurers are also heading straight into the platform economy after banks. And here, it is important to be an early bird, or in Google terms: to land on the first page, because who looks at the second page of search results on Google?

The platform boom is in full swing, as financial players are already seeking support. While banks and insurers have a huge customer base, they are not known for implementing a digital platform, especially from a technical perspective. Moreover, banks and insurers have realized that, in addition to pure insurance comparison, holistic customer care with needs analysis and online insurance switching represents a significant business potential. However, the expertise of financial service providers in these areas is limited. The existing platforms are not developments of the major institutions. This is where technology providers come into play. JDC, Friendsurance, Hypoport & Co. operate in the background as white-label platform providers and have already made headlines due to their collaborations with banks, savings banks, and insurers. Their digital platforms offer a comprehensive set of features that significantly simplify the daily routine of all parties involved, especially end customers.

The developments show that whether it’s Digital Bancassurance, Open Banking, or Open Insurance, one thing is certain: no matter which buzzword is used, they all have one thing in common—they point to the inevitable path of financial service providers directly into the platform economy.

Authors: Stefan Roßbach & Raik Borkowski

Share:

PAWLIK News

Stay up-to-date and benefit from insider knowledge and tips on our XING and LinkedIn channels.

Want to find out more?

Make an appointment with our experts now!

PAWLIK Growth Loop

Four Service Areas for All-Round Positive Growth

We’re there, at your side in four key areas: Our experts are there to offer guidance, facilitate cultural transformations, identify the right talent, and assist employees in lifelong learning and their continuing improvement.

News

Joachim Pawlik Interview
Why does our society seem so powerless at the moment – and what can we all do about it? Is it the many crises? Are...
Navigate uncertainty with positivity
Strategies for positive communication – Communication isn't just about information; it's the glue that holds teams together. It's about creating connection, building trust, and inspiring...
The power of Proactive recruitment in 2024
A game-changing strategy – In the dynamic landscape of recruitment, employers are no longer content to sit back and wait for talent to come to...
Unleashing proactivity: the 5 P’s for a proactive mindset 
A critical self-reflection about actions in the workplace – Are we reactive, responding to events as they unfold, or are we proactive, taking charge and...
Proactive in Turbulent Times
The topic "proactive" is more relevant than ever, as the latest survey by the PINKTUM Institute at https://pinktum-institute.com/ shows. According to the survey, one in...
How a Digital Process Supports Empathetic Leadership
Empathy is always in high demand in a corporate context, especially when organizational changes are on the horizon. In these sensitive phases that affect everyone,...
How Empathy Becomes Part of a Modern Corporate Culture
The transformation in the world of work is leading to a shift in thinking within companies. A global survey¹ conducted among 500 CEOs, including 50...
How Empathic Leadership Succeeds
Empathy, the ability to perceive and understand the thoughts and feelings of others, is becoming a key competence for managers due to the dramatic changes...
Systemic Coaching – A Central Practical Competence
As an established form of individual counseling that supports people in reflecting on and shaping their work and life contexts, Systemic Coaching opens up opportunities...
Empathy and Efficiency: A Contradiction or the Perfect Combination?
In today's business world, two buzzwords often seem to contradict each other: Empathy and Efficiency. Even the US-based business magazine "Fortune" ("Efficiency Is In. Is...
Current PAWLIK Study: Majority of Employees Dissatisfied With Employee Bonding
A recent study by PAWLIK Consultants in cooperation with the rheingold Institut shows that the majority of companies in Germany are not doing enough or...
"People Want to Be Part of Success and Failure – Otherwise You Lose Them."
At the 21st Pawlik Congress on November 14-15 in Hamburg, Dr. Joachim Gauck, David Coulthard, Jürgen Klinsmann and other speakers spoke to 250 guests about...
High-Class Guests in Hamburg
High-class guests in Hamburg: Joachim Pawlik welcomes former German Federal President Dr. Joachim Gauck, soccer world champion Jürgen Klinsmann (virtual), rock legend Bruce Dickinson, fighter...
PAWLIK Launches New Digital Method for Simplified Personnel Diagnostics
In cooperation with psychology professor David Scheffer, the PAWLIK Group has developed the psychometric method "Screenfact". In just five minutes, it provides HR managers and...
21st PAWLIK CONGRESS "Cohesion – Tomorrow’s Bonding Forces"
We are happy to welcome you back to our PAWLIK Congress at the Gastwerk in Hamburg on November 15, 2022, we welcome you again. Our...
Almost 60 Percent of Employees Primarily Strive for Power
Almost 60 percent of employees primarily aspire to power. "Leaders need to deal with this more consciously."
The New Empathy – Key Competence of Modern Leadership – Video
At the Handelsblatt Media Group's first "Work in Progress" on June 1 and 2, 2022 in Düsseldorf, Joachim Pawlik gave a keynote speech on empathic...
5 Tips on How to Make the Earn-Out Model Work When Selling SMEs
"If the company's value hinges on industry expertise and customer access, acquirers are looking for more future security" Many SMEs are in danger of not...
Yvonne Kahl is Director CSR of the PAWLIK Group
The PAWLIK Group's former Head of Human Resources, Yvonne Kahl, now heads the newly created Corporate Social Responsibility department, relying on personal commitment from the...
"Our employees are the engine of our CSR."
Yvonne Kahl is responsible for the newly created Corporate Social Responsibility department at the PAWLIK Group. She explains in an interview how she makes CSR...

Contact form

PAWLIK News

Stay up-to-date and benefit from insider knowledge and tips on our XING and LinkedIn channels.