How open insurance will reshape bancassurance Abstract

The open insurance paradigm offers new possibilities.

It will help reinvent the traditional bancassurance business model and design innovative offerings. Data is at the core of open insurance, and data harnessed from ecosystem players offers banks opportunities to expand the bancassurance portfolio to include insurance products focused on individual customers’ needs, besides adjacent and contextual financial services. This, in turn, will help banks enhance customer engagement and cement loyalty through hyper-personalized propositions across the customer lifecycle.

To ably orchestrate value-chain services by leveraging ecosystem partnerships, banks must define the key structural aspects of a resilient, multi-sided, and digital bancassurance model. We propose an ecosystem-aligned bancassurance platform that can empower banks to gain unconventional insights and co-create contextualized offerings to gain a competitive edge.

Open insurance

Open insurance is an evolving concept, which is gaining wider attention in the European Union (EU).

Data is critical to successfully adopting open insurance given its importance in the insurance value chain across customer proposition, risk pricing and actuarial decision-making, policy and claim administration, and customer servicing. Open flow of data among participating players—both insurance and non-insurance firms—helps design contextualized offerings for customers’ unique needs by using personal, non-personal, traditional, and non-traditional (alternative) data insights. Also, interconnected value chains and new partnerships help identify new business use cases across the insurance industry. Adopting open insurance, however, comes with risks and will require insurers to strike a fine balance between risks and benefits. A prime use case of open insurance is bancassurance—the open insurance paradigm has the potential to significantly reinvent the traditional bancassurance business model. Easier data exchange among ecosystem partners and new insights can expand the horizons of bancassurance to offer products such as loans and investment and wealth advisory that go beyond insurance.