InsurTech and Financial Consumer Protection

Technologies are reshaping the insurance industry. Technologies are transforming the way insurers distribute, underwrite, manage products, and settle claims. Artificial Intelligence utilizes a wide range of data, and algorithms to access risks, target customers, and recommend products. It is not only that technological innovations improve the efficiency and lower frictions in each step of the value chain, but the industry is undergoing greater change. New market participants such as startups, Big Tech platform firms, manufacturers, and other service providers have entered the insurance industry in one way or another to serve their customers in the ecosystems. Although most changes seem to benefit financial consumers, the widespread and rapid change can create grey areas in financial consumer protection regulations, resulting in unexpected harm to consumers. In this study, I summarize current changes in the insurance industry and provide issues that call for supervisory attention in terms of financial consumer protection.