Government is discussing the idea of ‘Open Finance’ as a progression of ‘Open Banking’ providing customers with better access to information on their financial products through use of data sets driven by application programme interfaces (APIs).
Any technology-led developments that will allow customers to manage all their policies on one personalised dashboard need to be carefully thought through so that they do not generate unintended consequences. Issues around data protection, competition law and mid-term termination or inadvertent reductions of cover within the insurance contract all need to be considered.
Open Insurance may support customers looking to switch providers, however, unlike banking, insurance contracts last only one year.
This already allows customers the opportunity to regularly ‘look around’ for alternatives either directly, or via their broker.
For Open Insurance to work effectively, those that the FCA feel are disengaged with the current renewal process will still need to be proactive in managing their insurances either online or by downloading an app so that their data can be accessed by suitable providers.
Circumstances such as an ongoing claim where the data is incomplete or is sensitive (special category as defined in the GDPR) may not be available or legal to upload causing a gap in information. The need for consistency and fairness in access to customer data are issues previously raised by the FCA’s Director of Competition.
To engage with members, the FCA and other relevant stakeholders to examine the benefits, risks and opportunities that Open Insurance may present.
“It’s important for people to be able to manage their insurances effectively and Open Insurance could help improve this. However, as with all change it’s key to understand the adjustments in behaviour this may bring and to ensure that any unintended negative consequences are avoided.”
Managing Director, Ashley Page
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