FEBRUARY | AI in Insurance | BigTech in insurance | Common European Data Spaces | State of SupTech | Open Finance | Cyber Insurance

Welcome to the February edition of my personal monthly newsletter on InsurTech regulation and policy!

My aim with this newsletter is to keep you up to date with the latest developments in InsurTech regulation and policy in the EU and beyond.

However please note that the views expressed in this newsletter are exclusively my own and should not be considered as representing the views/policies of the EIOPA with which I´m affiliated.

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#InsurTech #FinTech #insurance #innovation #AI #ArtificialIntelligence #BigTech #CyberInsurance #GenAI

Cyber Insurance - Models and methods and the use of AI

The main objective of this recent ENISA report is to introduce cyber risk and cyber insurance, provide an overview of existing research and modelling approaches, and identify gaps for upcoming research projects.

Read more here.

Embracing the UK’s Open Finance Opportunity

UK Centre for Finance, Innovation and Technology (CFIT) has published a report setting out the potential of Open Finance to deliver benefits for UK consumers and businesses.

The findings show how better data-sharing can provide improved access to credit for companies and swifter, more effective financial advice for consumers.

More concretely, the paper explains „Proofs of concepts“ in providing financial advice to consumers and enhancing SMEs’ access to credit.

Read more here.

MAS Advisory on Addressing the Cybersecurity Risks Associated with Quantum

Monetary Authority of Singapore (MAS) recently published advisory outlines cybersecurity risks arising from developments in quantum computing.

It also highlights mitigating measures that financial institutions should consider.

Read more here.

State of Suptech Report 2023

This report provides a global snapshot across several facets of supervisory technology (suptech), including underpinning digital infrastructure and technologies, supported supervisory use cases, approaches employed for developing and deploying suptech applications, and the related challenges and risks.

The State of Suptech Report 2023 focuses on how the development and implementation of suptech is evolving across the globe, extracting insights from the information provided by 64 financial authorities such as central banks, securities and capital market authorities, financial conduct authorities, and insurance supervisors from six continents.

Read more here.

Common European Data Spaces

European Commission has published second staff working document providing an update on the status of the common European data spaces.

First, it gives an update on the enabling EU legislative framework for data spaces.

Second, it presents the state of play of data-space related EU support actions.

Third, for each sector- or domain-specific common European data space, it presents progress over the past two years as well as the upcoming key milestones.

Among other things it provides an update on common European financial data space, which includes three main components.

The first relates to business-to-business and business-to-consumer data sharing in the EU financial sector or open finance (PSD2 review and FIDA proposal).

The second is the establishment of the European Single Access Point (ESAP) which is a technical infrastructure that will offer free and public access to information in the areas of financial services and capital markets.

The third component aims to put in place a system that delivers accurate, consistent and timely data to supervisory authorities at EU and national level, while minimising the aggregate reporting burden for all relevant parties.

This is complemented by the Data Hub initiative which aims to facilitate the reuse of certain public sector data that cannot be made available as open data.

Read more here.

2024 Global Outlook for Banking and Financial Markets

This recent outlook explores the impacts of generative AI in finance.

Key takeaways section highlights following:

• Almost 8 in 10 institutions (78%) are tactically implementing generative AI for at least one use case
• AI priorities reflect omnipresent concerns about risk—and client relationships
• AI governance is a must-have.

Read more here.

5 key generative AI use cases in insurance distribution

Accenture has highlighted five use cases that illustrate the promise of GenAI for insurance brokers and agents.

These are:

• Submission preparation and client portfolio QA
• Client-specific marketing materials at speed
• Actionable “clients like you” analysis
• Revenue loss avoidance
• Intelligent placements.

Read more here.

Customer data access and fintech entry: early evidence from open banking

Bank of England has published staff working paper on customer data access and fintech entry: early evidence from open banking.

Read more here.

Digital Finance in the EU: Drivers, Risks, Opportunities

This recent e-book includes contributions from experts in the field, covering key topics discussed during the first academic year of the EU Supervisory Digital Finance Academy (EU-SDFA).

The articles in this e-book have been grouped in three broad areas: overview of the main initiatives taken at European Union level and the challenges and perspectives from a global viewpoint; the main technologies and drivers of digital finance; the main risks and opportunities involved in digital finance.

The e-book is intended to enable past and future EU-SDFA participants to complement their learning experiences, while also providing valuable documents to readers interested to get an understanding of the interplay between digital finance and supervision.

Read more here.

BigTech direct financial services provision

The ESAs has published a report setting out the results of a stocktake of BigTech direct financial services provision in the EU.

The Report identifies the types of financial services currently carried out by BigTechs in the EU pursuant to EU licences and highlights inherent opportunities, risks, regulatory and supervisory challenges.

In insurance, three subsidiary companies of BigTechs are authorised as insurance intermediaries and two as insurance undertakings.

In terms of next steps, as part of the European Forum for Innovation Facilitators (EFIF) 2024 work programme, the ESAs intend to further strengthen the cross-sectoral mapping of BigTech financial services activities and relevance to the financial sector.

This will be done via the establishment of a multi-faceted data matrix.

The matrix is intended to provide a framework to monitor dynamically with more granularity the type and scale of direct provision of financial service activities by BigTechs in the EU, their role as major technology providers as well as the provision of gatekeeper platform services under the new Digital Markets Act.

Read more here.

Transforming insurance through AI

This paper is looking AI and its potential in insurance sector, including its benefits and challenges.

Read more here.