We sat down with the co-founders of Insurely, Martin J. Gylfe (CEO) and Lotta Rauséus (COO) to talk about the opportunities of open finance for the insurance industry. Insurely is a B2B SaaS company, providing solutions within open finance to banks, insurance companies and other companies where insurance, investment and pension is relevant. It licenses real-time customer data access APIs of insurance data to its clients, as well as a range of different pre-built user interfaces to support clients in building new digital consumer experiences. So, how can financial firms leverage open finance to their advantage? Let’s find out more!

Why is open finance relevant now?

Martin: “Open finance fundamentally changes the way insurance business is conducted by impacting various elements of the value chain. It enhances transparency and accessibility to financial data, enabling better decision-making for both insurers and customers. This shift towards greater transparency and accessibility will drive product innovation, and enable more insights and more personalized advice in the financial industry. Customers stand to benefit from these changes through more tailored and innovative insurance products and services. This trend towards increased competition and innovation is likely to continue as open finance becomes more prevalent in the financial industry.”

Why should insurers act now, instead of waiting for open finance to become more mainstream?

Lotta: “Companies who were early adopters of open banking gained a lot of competitive edge and we see similar trends for open finance. The companies who embrace open finance has the opportunity to establish themselves as industry leaders and will gain a lot when it comes to trust towards their customers. By fostering partnerships and ecosystem integration, insurers can unlock new opportunities for growth and innovation while addressing regulatory challenges and ensuring data security and privacy.

Open finance in the insurance industry can translate into streamlined processes, enhanced customer experiences, and the development of innovative products. Open finance platforms can create options to integrate insurance offerings with banking services, providing customers with a more seamless experience. A good example from banking is the use of open banking APIs by budgeting and financial management apps. These apps aggregate financial data from various sources, including bank accounts, credit cards, and investments, to provide users with a comprehensive view of their finances and offer more accurate insights and recommendations.”

Let’s summarize and talk results. What could be the results when adopting open finance as an insurer?

Lotta: “I would say that there are three main results.

• Open banking and open finance initiatives enable insurers to access real-time financial data, improve underwriting accuracy, mitigate risks, and develop innovative products. This leads to enhanced operational efficiency, reduced costs, and increased competitiveness in the market.

• Customers benefit from more personalized insurance offerings, competitive pricing, and streamlined purchasing processes. Access to financial data allows insurers to offer tailored recommendations and proactive risk management solutions, ultimately improving customer satisfaction and loyalty.

• Open banking and open finance promote financial inclusion by providing individuals and businesses with easier access to financial services and products. The enhanced transparency and security measures associated with these initiatives contribute to building trust in the financial ecosystem, fostering economic growth and stability.”

What’s your vision for the future for open finance?

Martin: “Looking ahead, the future of data-driven finance in Europe appears promising, marked by significant strides towards establishing a robust framework. The adoption of the Financial Data Access Regulation (FIDA) proposal by both the European Commission and the European Parliament underscores a pivotal step toward empowering consumers and fostering innovation within the financial sector. I expect the momentum to continue - 2024 will be a transformative year for open finance, aligning closely with EU legislative priorities. The comprehensive scope of FIDA holds the key to unlocking new avenues of innovation, promising a landscape where consumers are empowered and industry innovation thrives.

Future success for insurers lies in utilizing open finance for more personalized advice, enhancing transparency, competition and innovation in the financial sector. Insurers who adapt to these principles will thrive by using customer data from different open finance players. But it’s all about the consumers consent, and consumers initiating a collection of their own data. With customer consent, insurers and banks gain access to a variety of data, from insurance details to pension and investments. This helps insurers understand their customers better, leading to personalized financial products and moving beyond one-size-fits-all and tailoring products to individual preferences. This not only boosts customer satisfaction but also increases trust and profitability.

Many insurers have already invested in technology to enhance customer experiences, yet with the market becoming more competitive and commoditized, legacy insurers must further emphasize a customer-centric approach.”

How can insurers start with open finance and can insurtechs or other stakeholders help them with adopting it?

Lotta: “Insurance companies can take advantage of their position in the industry: first of all, they have a lot of data and they also have deep industry knowledge that allows them to develop tailored insurance products and services to meet customer needs. Consumers already trust them and see them as experts in the industry. Leveraging this will be crucial for insurance companies to stay ahead of the competition, personalize offers and better understand their customers. In order to do so, being proactive and taking lead when the new regulation is coming will be crucial for their future success.

Insurers are increasingly turning to insurtechs for data aggregation, platforms, and digital support, intensifying competition and raising the stakes for those lagging behind in technological advancement.

There is a need for insurers to shift their focus towards value realization in a digitally maturing landscape. This includes advancing data management and analytics maturity to understand customer needs and fostering consumer-centricity to develop their services. Competition in the industry will grow and push insurers to improve their technology to keep up.

In this scenario, the involvement of EU institutions such as the European Commission and the European Parliament will play a vital role in shaping the landscape of open finance through regulatory measures impacting the financial sector. Their encouragement of the industry and advocacy for consumer-centric changes will expedite the industry's shift towards openness, facilitating a smoother transition.”

Why is open finance relevant for Insurely?

Martin: “Our technology introduces the concept of open finance in practice, with solutions that allow consumers to collect and share their personal financial information instantly and in real time, whether it’s insurance data, pension data, or savings data. Once collected, the consumer data is aggregated and structured to represent a coherent set of parameters across several financial providers. The information is made available to the provider through an API, in real time or on demand, up to a predefined retention period. With open finance, insurers and other financial providers can build a platform that enables consumers to manage, switch, and buy insurance policies or manage pension transfers seamlessly.

How people manage and buy insurance is fundamentally changing. With access to real-time data about consumers, both existing and potential, the providerwill get the insights they need to offer their customers a more personalized, transparent, and innovative experience. This will increase customer loyalty and revenue and is ultimately a true win-win for both the provider and the consumer.

With a new generation of buyers on the horizon that have different buying behaviors and higher expectations of the companies they interact with, the time to act is now."

Who is Insurely?

Insurely, headquartered in Stockholm, was founded in 2018 by Martin J. Gylfe, Lotta Rauséus, Eric Lövinder-Sevelius and Johan Forsman. Insurely creates a more open and transparent market by introducing innovative API's and user-friendly solutions for open finance, focusing on insurance and pensions. In 2022 Insurely raised ca €20 million in a Series A funding round that was led by Insight Partners with participation from Ampli Ventures, SEB and Opera Tech Ventures. Previous investors, Luminar Ventures, Philian, and Neptunia Invest continued investing in the Series A funding round. In 2023, Insurely secured an additional €8 million through a convertible note led by Nordic investor CNI.

Learn more on their website