The PSD2 Shadow Effect

When Regulator says Open Your Data to the Banks, the Insurers have to listen

The new customer, the Digital Native wants to work digitally, wants to compare and wants usually all (basic) financial information in one digital view. His ‘Internet shaped  DNA’ doesn’t understand and in the long run will not tolerate offline traditions and patterns of classical incumbents, I assume. Two of these customer needs have already been the base of a lot of successful inventions and startups in the past years. All of us working in the insurance  sector know and respect the power of digital aggregators.  Since some years the customer can now work digitally and compare. What still wasn’t satisfied is the need of Consolidated Digital Views. Some startups in the last years tried to fulfill this requirement, with more or less average success. Far away from the success of implementing the Digital and Comparing Capability. But times might change now. The ‘Digital Insurance Folder Idea‘ gets a second chance with PSD2, I think.

Gone are the Days

With the PSD2 directive the regulator tells the banks to open their data. But not only open ‘their’ data, but to open a lot of customer data and subsequently also a lot of insurance data. Third Parties, Startups and also traditional incumbents can now satisfy the third basic need of the customer: The one place for all their insurance data. Automatically, with one click.  Gone are the days as  the customer had to manually add his insurance data into web interfaces or activate  long taking, in-transparent and risky manual data and account transportation processes. Gone are the days as the legal situation was unclear and consequences unpredictable. One might say it’s only the header data of the insurance contracts, but it’s an entry, a starting point. The days of the manual, error prone and complicated creation  of The  One View  are over now, if you ask me. With one click and some Machine  Learning in the background! Once the user has established a relationship with the new  or old Third Party (activating the new third capability by linking his bank accounts) the steps to Detail Data, Contract Management, Change and New Business are minor ones, I predict. In some years nobody will remember that one had to handle every insurance contract form different insurers differently. What this means in terms of customer relationship, interactions and loyalty everybody has to find out on his own. I’m just asking myself,  if the regulator really has understood that he also opened implicitly the insurer’s data, when he forced the banks to become more open? Were the insurers allowed to have had an opinion in advance?    

2019 – The Year of PSD2 Insurance

ExcecInsurtech 2018 – In a Nutshell

It was a pity that I couldn’t attend longer the brillant organized and inspiring ExecInsurtech 2018. But even with only the few bits I took with me I predict 2019 will be the year of PSD2 Insurance. I saw a lot of interesting solutions and ideas. On a high level these could be sorted into one of these three categories:
  1. PSD2-Aggregation – Creating Multi-Insurance- and Account-Views with the help of PSD2
  2. PSD2-Contract- and AccountManagement – Comparing and offering Insurance alternatives  with the help of PSD2 and KI
  3. PSD2-Advisor – Full-fledged full-automated Robo Insurance Advisor with the help of customer account- and transaction-information and KI
I am very curious, if these new technical and business capabilities will be accepted by the market and the customers.  And if and how these will then influence traditional  carrier relationships finally. Besides I also discussed Open Insurance compared to and in the context of PSD2. With the help of Friendsurance’s Sebastian we got a first  insight into and  impressions of how PSD2 insurance can work.

Masterclass PSD2 and OpenInsurance

Together with our classroom participants we discussed, if PSD2 derived Open APIs could also be a trend for insurance.  After the exchange of some  controversial views we answered the following polls: These polls and our classroom results are far from being representative. But with the solutions I saw at ExecInsurtech, the feedback I received and  the discussions I led I believe I see a trend. And an interesting question remained in the room: How should/could the existing and traditional world handle and react to it?