Open Cologne – The First Open Insurance Initiative

In a Nutshell

Open Insurance before others will do it. Bring Insurers back into the driver seat to competing with the current platform-economic and  Insurtech Digital evolution. Found an organization managing and governing our Insurance Open API Initiative. Start small and local, but within an important environment for Insurance in Germany – Cologne. Be open for every Insurer and every startup, every tech company. Create the Open Cologne Initiative and Group.

Everybody ist talking about Open Finance APIs.

The Open API is the power behind the disruptive Fintech and Insurtech movement. Open APIs are the fuel of the platform-economic revolution. People claiming the importance of Open APIs for future finance innovations are not wrong! But do we really find Open APIs within the finance business today? To acknowledge an API  as open it must at least fulfill  these requirements from my perspective:
  1. The corresponding business sector must be mandated to open its business via API. An API consumer can find same functionality at all incumbents of a business sector.
  2. An API must follow a comparable specification and technical standards. The consumer can apply to some extents the same technical API implementation for all incumbents.
  3. The API is a B2C API protected by necessary technical customer governance and security. The consumer can decide where and how to use the API.
  4. The basic and mandatory APIs are free of charge for the customer

No one is providing real Open Finance APIs today.

Banking APIs in Europe are slowly coming close to my definition of Open APIs. With PSD2 and GPDR Open Banking APIs are at least fulfilling three of the four requirements of my definition. At some point in the nearer future PSD2 APIs could also fulfill the one technical specification condition (like the one of the PSD2 BerlinGroup). It would become Fully Open API compliant then. Within the Insurance vertical there are no Open APIs today. Even if some Insurance companies are opening their systems via APIs today none comply with the given constraints.

Without Open Insurance APIs no successful Platform Economic and Insurtech Development

And without true Open Insurance APIs no democratic and sustainable innovative Insurance development over the coming years. Non existing transparent and standardized access to the customer’s data will  encourage specialized and proprietary aggregators. As it’s their business model they are the only ones being able and willing to investing in necessary technical infrastructure.  Aggregator architectures and corresponding aggregator platforms will lead to typical monopolistic Internet structures. It will slow down, if not even prevent at all innovative, customer-centric Insurtech developments.

Open Cologne is the answer to fight Wallet Insurance Gardens

In the long run we believe other verticals need an openness and API regulation like PSD2 as well. Insurance is one of those business sectors.  It’s not only closely related to banking.  But with new digital Bancassurance models Insurance is getting closer to banking than ever before. We believe, we will need an official European regulation, but this will take some more years considering how long the evolution from HBCI to FinTS to PSD2 took. Therefore we suggest to founding the Open Cologne Working Group. Their strategic objectives are the following:
  1. All Open Cologne member publish an aligned and confirmed set of functions  via APIs – on a mandatory base (besides optional functions are possible).
  2. The mandatory API part is free of charge for the customer
  3. The APIs focus a B2C API customer-controlled architecture (‘consent’)
  4. Open Cologne Group will govern and secure APIs comparable to PSD2 (SCA RTS) .
  5. The Open Cologne Group is the management and governance instance until a more suitable institution has been established. The OCG provides Third Parties (TPPs) with necessary certificates and governance to accessing Cologne Group Certified insurers.

Open By Nature

The Open Cologne Group is open to every Insurer, Insurtech, Tech Company and Fintech.  Therefore OCP invites all parties, who are interested in forming the group  and developing the API, to joining OCG. The name has been proposed as Cologne is a significant Insurance City with many insurers in Cologne (over 70) and as appreciation to the PSD2 BerlinGroup. Besides it makes sense to starting with a smaller and local set of Insurers to reducing complexity, efforts and risks (‘sandboxing’). If you are an Insurer, Fintech, Insurtech or comparable please send us a email to articulating your interest. We will start anyway. But we can only achieve ‘Real API Openness’ if a lot of our vertical members  participate. More Background –