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EIS: Insurance Regulation is an Opportunity, Not an Obligation

‘Consumer-first’ regulation is sweeping across professional services like never before, and providers must ride this wave to their advantage if they’re to reach the surface when the current settles. 

The ambition to achieve real, long-lasting change through the creation and application of regulation has extended across the full scope of professional service industries, particularly to insurance technology (insurtech) providers. 

Insurance Regulation
Rory Yates, SVP corporate strategy, global, EIS

While the focus of The Fintech Times routinely lands on the position of financial services within this application, here Rory Yates turns our attention to the equally-as-compelling regulatory world of insurtech.

As SVP of corporate strategy for the digital insurance platform EIS, Yates helps insurers achieve their transformation goals and evolve toward ecosystem-based futures via insurance core systems transformation, including personalised engagement, quickly taking innovation from concept to market and growing efficiently.

EIS, headquartered in San Francisco and founded in 2008, engineered its solutions specifically to remove obstacles and grant insurers the freedom to pursue and achieve their most important strategic goals.

The digital insurance platform’s open, cloud-native coretech platform liberates insurers to grow market share and enter new markets, develop new products and build engaging experiences while lowering acquisition costs, boosting retention and delivering greater revenue and profits for the long term.

In this latest opinion piece, Yates discusses how insurtechs are reacting to this new wave of regulatory reform, why they are missing out on major opportunities, and how they must ultimately realise the true potential of change for the better:

Insurance regulation is an opportunity, not an obligation

Regulation continues to be one of the major drivers of change in the insurance market globally. Intended and designed to improve trust and customer success, regulatory changes in the UK, like GDPR and Consumer Duty, provide the perfect opportunity for insurers to form meaningful customer relationships.

So far, it’s a missed opportunity, which is frustrating. Despite massive investments in their businesses, insurers continue to struggle with making the most of the positive force regulatory change provides.

Genuinely agile insurance models have been stifled because they haven’t been developed in consultation with regulators. As market enablers, regulators can be a force for good. To thrive, insurers must stop treating regulation as an obligation and see the opportunity it provides.

The biggest constraint is the sector’s continued inability to understand and interpret regulation and build it into the working model for the business. Especially in the processes surrounding change.

To benefit, insurers must be able to see and understand their customers fully and adapt their experience to the data gathered. But the sector’s reluctance to embrace new ways of working and ecosystem-enabling technologies has put them at a severe disadvantage.

So, when a change happens, insurers simply lack the toolkit and business model to act effectively, making real change highly complex and expensive.

As a result, low trust and a drive to get the ‘best price’ still dominate many insurance markets. This stems from a transactional relationship, low touch, a general sense that the only purpose is to pay out if a risk has been realised and a belief that the business is engineered to do the opposite.

Insurers barely scratch the surface of using digital capabilities to enrich even relatively simple things like making sure people understand their policy.

Insurers must integrate with a wider world

As we enter a new era of ecosystem business models, insurers must integrate with a much wider world, embedding insurance and adapting to massive changes in the macro-environment and the natural environment. That means exchanging data and integrating it with a proliferation of distribution opportunities.

If insurers are to differentiate themselves in this era and form lasting relationships with people, they need to embrace regulation and use it as a drive towards developing more meaningful value propositions. Ones that are more integrated, risk-reducing and flexible, with far more meaning placed on how they can be valuable to a customer.

The further rise of distribution in insurance means that to stop price-driven churn and compete better in these channels, insurers need to change and become ecosystem businesses. It’s an approach we have seen work exceptionally well in finance.

Building relationships is something that banks have focused on, and for now, fintech has had success in providing far more holistic views of people’s money in the context of their lives and then facilitating more value. For example, Revolut’s payment protection insurance is a built-in module of its banking services. In insurance, insurtechs are doing similar as we’ve seen with We Fox’s 360-degree offering.

This is only the beginning

The current spate of change that insurers must adapt to is only the start. More significant and complex change is coming. Insurers will need to provide full and transparent audibility and, soon enough, real-time audibility, where the industry must ‘prove’ customers were offered every chance to understand the product and services they have purchased.

The other big changes are the need to address vulnerable customers and provide alternative coverage rather than simply rejecting or out-pricing those risks.

There’s also a massive shift coming in the actual definition of insurance as the industry adapts to the rise of insurtechs, embedded insurance, ecosystems, risk removal and the accompanying regulatory changes that necessarily will follow.

Regulation ensures a fair and competitive market, shaping sustainable and value-generative businesses. It doesn’t always get everything right, but ultimately the outcomes are hugely beneficial.

As we drive towards big shifts in things that relate to treating customers fairly, insurers will need to adapt to pricing structures in which an acquisition price followed by a rate hike at renewal are things of the past. To do this, they will need highly adaptable business and technology architecture and the right foundations to drive change in this ever-evolving regulatory landscape.


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