Insurance supervisors must change their approach to not only oversee the prudential and market conduct of insurance companies but also support the industry's development and efforts to implement technology, said Thailand's Office of Insurance Commission secretary-general Dr Suthiphon Thaveechaiyagarn, during his keynote address at the InsurTech Summit Thailand yesterday morning.
This approach was behind the OIC’s decision to open the Center for InsurTech, Thailand (CIT) in late August; a centre for exchanging knowledge, integration and cooperation between the insurance industry and technology firms. “Small players who have limited resources to buy technology from foreign firms will have CIT to assist them in finding a reasonable alternative from Thai start-ups,” he said. “The OIC also encourages insurers and start-ups to develop new insurance products through the regulatory sandbox, which will allow them to create technology-based services within the experimental market,”
Regulators must also be careful in their approach to technology supervision, he said. “Technology can change very rapidly, and the implementation of these installations might not be able to fully supervise the change of technology. Especially a hard law that is written down strictly may cause rigid implementation and may not be able to cope with technology development and might defer industry development, preventing the industry from innovating.”
He promoted the use of soft laws which have more room for interpretation and can issue guidelines, which will be preferable in supervising digital trends. “Technology evolves spontaneously, and opportunities and challenges emerge along with it. For insurance companies, they are encouraged to take advantage of digital disruption to either improve the efficiency of existing business or create a new business model,” he said. “For regulators, the supervision of the insurance industry in the technological era must be flexible and the regulation should supervise only when it is necessary, rather than putting in strict requirements in every issue. The supervisor should only lay down fundamental minimum standards of practices. We must maintain a balance between the necessity to protect consumers and the adoption of technology for growth of the industry.”
The InsurTech Summit was jointly organised by Asia Insurance Review and InsurTech Asia Association and was host to over 140 delegates.