Technology forces insurance regulators to innovate, too
Photo | HBJ File
Connecticut Insurance Commissioner Katharine Wade.
As insurance companies increasingly look to new technologies to change the way they price risk, interact with customers and develop new products, the industry is also grabbing the attention of regulators.
During the sixth annual Insurance Market Summit in downtown Hartford earlier this month, Insurance Commissioner Katharine Wade addressed a room packed full of insurance executives, acknowledging that while InsurTech is changing the game for the industry and consumers, it's also “definitely changing the game for regulators,” as well.
“Regulators fully recognize the desire for new technologies to drive innovation in insurance products and improve the marketplace, but those products have to be fairly and accurately priced and they have to be suitable for consumers' needs,” Wade told the crowd at the Connecticut Convention Center, adding that there must be proper coverage and privacy safeguards put in place.
”Technology is revolutionizing the industry through the use of big data, predictive analytics, on-demand insurance, mobile platforms, autonomous vehicles, and drones just to name a few,” she said. “It's become a real balancing act for regulators. We don't want to stifle innovation but we're often dealing with technology startups that are new … and often not as familiar with the insurance sector and how a regulated industry operates.”
Wade said her department is in regular dialogue with insurers looking at new technology offerings. She also said the National Association of Insurance Commissioners (NAIC) has formed an innovation and technology taskforce looking for ways to better review more complex underwriting and rating models. NAIC also wants “a dialogue between regulators and innovators,” she said.
”We're ready and willing to have products tested (in Connecticut), to provide a regulatory sandbox … subject to the appropriate consumer safeguards,” she said.
— Matt Pilon
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