Key differences between 'Open Banking' & 'Open Insurance'


Arvinder Mudhar explores the differences between Open Insurance and Open Banking.

Arvinder MudharChief Information & Digital Officer at Unum, presents the key attributes of Open Insurance, and how it differs from Open Banking.

Topics he explores are:

  • The transactional nature of Open Banking
  • Data challenges around insurance purchasing, claims and actuarial
  • The strategic importance of these data sets to insurers competitive advantage




Arvinder: Going back to open banking - it had a side effect - PSD2 was a side effect of that, and we see the benefits there. I can log on to my an HSBC account and I can see my accounts from other the banking providers - that has worked.

I think with insurance there's three chunks of data or there's three transactions which are different.

You have quote, buy and renew, and that's its own process. And in some cases, it's an individual doing that, and in some cases you're doing that through an intermediary or a broker. That's actually almost a completely different data set to the claims piece, whicgh can be very, very personal. It can be medical insurance or it can be catastrophe insurance (for example). Then thirdly, and completely separate to all of that, is the data that generates and drives actuarial and pricing and underwriting.

So whereas I think with transaction banking, the data sets can be commoditised - its an account, a transaction where money goes from one place to another. I think within insurance we have to pick which of those three is the one that we say "actually, we are now going to make this open".

The challenge we have is claims and processing claims  is something that most companies treat as their 'personal data': it's the thing that they use to drive value and price, and therefore they are least open to sending it out to everyone else, and it's still one of the most private data sets. And quote and buy data is quite often in the public domain. Actuarial pricing is also something that it drives how you function. So I think we have to understand when we talk about open insurance, which of those areas are we playing in?

Become a member of The Insurance Network to join a community of people who are driving digital transformation in their business

Sign Up to TINsights
Where we share our latest blogs, industry reports and insights

Subscribe here

The Insurance Network (TIN)

Connect with us

Subscribe to receive industry insights, news and more by email

Subscribe here