Jean, 32, is looking for new car insurance in Luxembourg. At the moment, he has to gather all his insurance information and provide a lot of details to each insurer in order to get quotes. What if he had one centralised dashboard that brought together all the information from his different insurance policies in one place? This system would also allow other providers to add information about their offers. All Jean would then have to do is compare rates and offers.
Such data sharing is already possible in the banking sector, often with fintechs or between banks, and with the agreement of customers. Soon it could also apply to insurance companies and asset managers. The future framework for access to financial data (Fida) should drive the transition from open banking to open finance. If the EU member states and the European Parliament agree on the text, it could be operational by 2027. The first trialogue on the subject is scheduled for 1 April.
But the financial sector is putting on the brakes.
Resources are tied up with Dora and the implementation of the AI regulation.”
Fida almost disappeared from the 2025 work programme published in February by the European Commission. The commissioner in charge of the dossier, Maria Luís Albuquerque, gave the following justification for maintaining the project: “Promoting open finance is part of my mission statement, and we believe that it is essential to encourage innovation in the financial markets, in particular to help consumers better navigate the financial system and find the solutions best suited to their needs. This is therefore an important issue to tackle.”
The commission knows that it’s operating on hostile ground, particularly in the world of insurance. Aca, the trade association for Luxembourg-based insurers and reinsurers, says it “regrets that Fida has continued its rapid progress at European level. Indeed, our general feeling about this draft regulation is, on the one hand, very mixed about the added value such a project could bring to consumers, and on the other hand very worried about the impact it will have on insurance companies (in terms of complexity, costs and resources required).”
“The worst possible time"
Aca cites the second European Payment Services Directive (PSD2), which introduced open banking in 2015 (the obligations for which came into force in 2019). This experience, which "demonstrated these two pitfalls, has certainly been partly taken into account in drafting the Fida regulation, but in an insufficient manner and without taking into account the specificities of other sectors - such as insurance - this time directly impacted by the text".
For the association, there is no urgency to introduce data sharing schemes. "We continue to call for consideration to be given to the introduction of a 'pilot regime' allowing focus on the development of practical solutions, targeted at promising 'use cases', before forcing an entire industry - which will not be in a position to prepare for such upheaval in a few years - to enter into an overly broad and costly regulatory framework, which has not demonstrated sufficient evidence of expected positive effects."
Fida has come at “the worst possible time,” added the chair of the German General Insurers’ Association (GDV), Norbert Rollinger from Luxembourg. “Resources are tied up with Dora [editor’s note: Digital Operational Resilience regulation] and the implementation of the AI regulation.”
“At the same time,” he continues, “the consistent protection of sensitive customer data is essential. Only a high level of trust will create acceptance for new digital offerings.”
Companies immediately see the value of a consolidated view of their accounts.
Anne-Sophie Morvan, commercial director at Luxhub, observes that Fida is generating a lot of thinking, both within insurance and banking. “But these sectors are evolving differently. While most banks are now in a position to exchange financial information securely, the insurance sector is not necessarily at that stage yet. Customer relations are also uneven: people regularly monitor their bank accounts, but rarely consult their insurance policies. Yet better access to information could really benefit customers and potentially the insurers themselves, insofar as customers do not currently realise the limits of their cover, if they have any at all.”
The benefit is for individual customers, yes, but also--and above all--professionals, says Morvan. “Experience of open banking shows that the real beneficiaries are often businesses. And why is that? Because that’s where the business cases and the most complex issues lie. Unlike private individuals, who are rarely prepared to pay, businesses use enterprise resource planning (ERP) software. They immediately see the value of a consolidated view of their accounts, and tomorrow, of their insurance contracts.”
Without minimising the competitive challenge, Luxembourg for Finance also sees Fida as an opportunity for the Luxembourg financial centre. “If Europe adopts the right approach,” says LFF CEO Tom Théobald, prefacing co-authored with PwC, “then open finance has the potential to become a major competitive advantage for its financial services sector. It can inspire institutions to move beyond traditional banking and insurance models, evolving towards a fluid and integrated system, where customer focus and data-driven services become benchmarks of excellence.”
Filling coverage gaps
The insurance industry “currently faces significant coverage gaps, estimated at around €350bn US dollars in Europe alone, which is around 25% more than the total size of the market,” says the report. “Put more simply, there is a significant gap between what consumers demand and what the insurance industry is able to deliver.”
The report insists: “Open finance has the potential to help fill these gaps in coverage. For example, TPPs (third party providers) often have closer relationships with consumers than many traditional insurers, making them more responsive to customer needs. The insurance industry can therefore leverage these TPPs to improve customer service.”
“Open finance will unlock some insurance and customer data that was previously siloed within individual organisations, allowing third parties to use this data to better serve customers,” LFF and PwC point out. “When the vast potential of open finance is combined with the enhanced analytical capabilities brought about by AI, the scope for innovation in the insurance sector will expand significantly beyond current levels. Traditional players that fail to adapt to this new model could see their coverage gaps widen further and their market share shrink.”
Open insurance “is still only a small part of the overall sector,” the report further notes, referring to projections that “the number of open insurance users worldwide could reach 75m by the end of 2024, with Europe potentially accounting for 50% of these users.”
This article in French.