A more transparent commercial insurance market will have “tremendous value” for risk and insurance managers
FERMA has submitted a response to the European Insurance and Occupational Pension Authority’s (EIOPA) consultation on Open Insurance.
EIOPA is consulting on open insurance to explore whether and how far insurance value chains could and should be ‘opened up’ by the sharing of insurance-related and specific policyholder data amongst the value chain.
In its response FERMA encourages EIOPA to further explore the ramifications of the topic for corporate insurance buyers and SMEs, which are currently not sufficiently well considered in the document.
The European risk management association also emphasised that the ‘opening up’ of insurance data could have tremendous value for risk and insurance managers in terms of conducting risk assessments, investing in loss prevention measures and for strategies on risk transfer in general.
FERMA also made the link between EIOPA’s work on Open Insurance to its work on shared resilience solutions and for the natural catastrophe protection gap.
”As insurance buyers, our view is that if we were to have more transparency from the insurance sector on, for example losses and claims (to stress at aggregated level, and in line with all relevant legal & privacy requirements), this data would help inform decisions on prevention measures, and would ultimately contribute towards the overall goal of organisational resilience,” it said in its response.
Adding that: ”Sustainability-related data and data on cyber incidents would certainly be useful. We are also of the view that aggregated loss and claims data in ‘large risk’ business lines (eg cyber) would be extremely useful to those purchasing cover since it would enable more accurate risk assessments, and would better inform corporate insurance buyers about possible loss prevention measures.”
EIOPA’s exploration of the topic is linked more broadly to the EU’s Data Strategy and the move towards ‘Open Finance’ that began with PSD2 for the banking sector.
The consultation investigates the definition of open insurance and possible use cases, as well as the potential risks, benefits and regulatory barriers. EIOPA also explores the areas to consider for a sound open insurance framework.
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