Raidiam’s Technical Product Analyst Caio Tranjan looks at the factors that led to the creation of Brazil’s Open Insurance ecosystem, Open Insurance Brasil, and what its success means for national insurance markets around the world. Raidiam has been involved with this initiative since its inception in 2021.
Insurance companies thrive on data. To issue a new policy, they must assess associated risks, which is only possible if the data is available. As it becomes part of the core business, the idea of data sharing may become controversial – unless you look at it from the client’s perspective. For the client, being able to share data between companies brings the best deals to the table. In that sense, sharing data not only drives competition, but enhances industry practices. Prices now become more personalised and risk adjusted: and that’s what brought Open Insurance Brasil to life.
Driving forces behind Open Insurance Brasil
Driven by the key governmental insurance stakeholder, the Superintendence of Private Insurance (SUSEP), and boosted by the existence of Open Finance Brasil, Brazil’s Open Insurance (OPIN) initiative rapidly established a common data sharing environment where insurers and brokers can share customer data through the use of secure APIs. Even though this environment faces pioneering challenges, as the world’s first formal Open Insurance ecosystem, OPIN has already achieved significant milestones with the potential transformation of the entire national insurance market.
Leveraging lessons from Open Finance
Whilst the insurance and financial markets have their differences, Open Insurance regulators knew the importance of leveraging lessons learned from Open Finance Brasil. Sharing identical security and technological requirements allowed both to work with the same set of suppliers and as a result, knowledge was more easily shared and put to use between both ecosystems. Currently, our team of experts here at Raidiam provide the Trust Framework and the Conformance Suite for both Open Insurance and Open Finance Brasil, in production and Sandbox environments.
Challenges and triumphs in implementation
But, despite its successes, being a pioneer in a field is no easy task. In 2024 alone, Raidiam addressed more than 500 queries regarding API implementations. These numbers highlight broader issues: the difficulties of translating insurance use cases and business rules into technical requirements for the APIs. Additionally, standardising insurers’ specific needs and processes to a common API standard proved to be technically challenging. These obstacles led to the development of more flexible API structures, allowing for data sharing beyond the default requirements but also increasing friction for ecosystem participants’ implementation and potentially reducing adoption rates.
Phased approach to implementation
Much like in Open Finance, Open Insurance faces the challenge of encouraging usage among consumers. Service initiation addresses an immediate consumer need which, historically, accelerates adoption and this led OPIN to work towards service initiation from the start. Its full implementation has happened in the following three phases:
Phase 1: Insurers’ data accessibility
This first phase was implemented in December 2021 and was to make data about insurers themselves available, including standardised information on service channels, products, and services.
Phase 2: Consumer data sharing
Since March 2023, consumers have been able to share their data with insurers of their choice with the ability to revoke their consent at any time.
Phase 3: Service initiation expansion
Having laid the ground with the first two phases, Open Insurance is now going for the final step of full service initiation. This introduces new consumer services including:
- API Claim Notification: Allows service providers to transmit claim notifications from clients directly to their chosen insurers.
- API Endorsement: Allows service providers to transmit endorsement requests from clients directly to their chosen insurers.
- API Quote: Allows service providers to perform multiple quote requests across different insurers simultaneously, while also allowing quotes contract initiation.
Since March 2024, consumers have been able to access insurance services without needing to interact directly with insurers they have a relationship with. Instead, they can choose services from any provider through a unified platform known as Client Order Processing Company (SPOCs). These new players introduced by governmental insurance stakeholders are essentially insurance brokers that participate in the ecosystem by providing data, sharing services, or acting as intermediaries on data exchanges between customers and insurers. As SPOCs can use data to develop new products and also look for proposals that are more suited to their customers’ needs, they play a vital role in the way convenience and value are created to the insurance consumers.
The future of Open Insurance
As Open Insurance progresses, it continues to reshape the way services are delivered and accessed. Without a global benchmark for Open Insurance, its current stage of implementation has shown the need to deeply involve the business stakeholders in the discussions about use cases and API developments, as new functionalities and products rely heavily on the experiences and engagement of ecosystem participants as a whole. This evolution is expected to drive the creation of new business models, benefitting the entire ecosystem.
For consumers, it means gaining access to more efficient and cost-effective services. For insurers, this new environment presents the opportunity to explore new business models and develop new products, allowing them not only to increase market penetration but also to stay competitive. For regulators, the advancement of Open Insurance represents a critical step towards modernising and transforming national insurance markets. The capabilities introduced through Open Insurance will be the key to extensive market efficiencies and broader coverage, promoting a more robust and inclusive insurance sector in Brazil.
Interested in learning more about how we deliver trusted data sharing ecosystems in Brazil and beyond? Get in touch today!
Caio Tranjan is Raidiam’s Technical Product Manager and supports the Functional Conformance Suite Project for the Open Finance Brasil and Open Insurance Brasil initiatives. He is also responsible for assisting ecosystem participants with their implementations.
