Comment by Gabriel Bernardino. Digitalisation is challenging old patterns, also transforming the traditional business models of insurance companies. Processes that worked in the past are now being challenged by a growing number of new entrants, who often enter the market through cooperation agreements with established insurers. In an ever-changing landscape, one thing is certain: What worked in the past, does not necessarily work in the future.
The entire insurance value chain is already and will be further impacted by digitalisation, from insurers to intermediaries, distributors and service providers.
The use of big data and telematics, comparison websites and automated advice tools influence the interface with consumers. The increasing amount of personal data available and the power of data analytics will inevitably change insurance underwriting models.
However, with this come risks. Collecting and managing large stores of personal information from consumers, claimants and beneficiaries, means that insurers are increasingly exposed to cyber risks with serious implications also for customers.
The changes definitely bring some risks that require the close attention of regulators and supervisors but equally bring opportunities. New technology can revolutionise customer experience and generate lower costs. This is a unique opportunity to explore niche and segment markets to develop differentiated and innovative proposals, products and services to customers.
I believe that regulation should be technology neutral. Regulators should be attentive to maintain a high level of consumer protection without hindering innovation. Barriers to innovation, which is positive for consumers, need to be removed.
Currently Eiopa is involving supervisors, the traditional insurance industry and the new Insurtech in a constructive dialogue to identify the key areas to act and to build fair and proportionate solutions.
As insurance providers adapt to changing environments, it is always important to remember the needs of consumers and to make sure that their rights are always respected and their needs always addressed. This is as relevant today as it was 70 years ago and I am certain that this will still be relevant in 70 years’ time.
Image: Gabriel Bernardino, Chairman Eiopa (vwh)