Taiwan's Financial Supervisory Commission (FSC) recently authorised the application of insurer Cathay Life, in partnership with online travel agency ezTravel, to participate in a regulatory InsurTech sandbox programme.
The programme will enable customers to directly purchase travel insurance underwritten by Cathay Life on ezTravel’s online platform which seeks to make the insurance purchasing process more convenient. It aims to significantly optimise user experience so that customers spend less time purchasing online insurance by completing just four procedures.
The younger generation in Taiwan are avid travellers and driving the growing online sales of travel insurance products, said Cathay Life senior director of digital marketing & planning department Theresa Lin. In 1H 2019, travel insurance comprised 83% of total online insurance sales.
However, current regulations in Taiwan stipulate that customers can only purchase online insurance on the insurer’s website. This is said to have resulted in customers facing unnecessary website redirecting and possible duplicated membership registration with at least 10 procedures being required to complete the entire purchasing process.
In a recent interview with Asia Insurance Review in July this year, FSC director-general of the Insurance Bureau Shih Chiung-Hwa said that in order to ensure the safety and soundness of the financial system, the regulator had looked at the current development of a regulatory sandbox in the insurance sector with the ‘Financial Technology Innovative Experimentation Act’ being effective in 2018.
The act seeks to promote FinTech development and enhance the effectiveness as well as efficiency of the Taiwanese insurance market.
At that point in time, Ms Shih had said that an application for the InsurTech sandbox was under the FSC’s review.
Being the pioneer of digital innovation
As the FSC gradually expands the scale of the regulatory sandbox, Cathay Life is aiming to become the pioneer in digital innovation and will pursue to improve the lives of the Taiwanese.
Founded in 1962, the insurer primarily sells life, accident, health and annuity insurance products with its eight million policyholders accounting for one-third of the country’s population making it the largest insurer in Taiwan.
In terms of FinTech adoption, it has embarked on developing an open application programming interface (API) architecture prior to the official launch of the regulatory sandbox and extends its offerings of insurance products via the APIs which are managed and maintained on an API management platform.
Such developments in leveraging technology is said to have led to Cathay Life’s successful application for the insurance sandbox programme.
Cathay Life CEO Andrew Liu said, “While most people stay with things they are familiar with, the main factors for dominating digital era is being dynamic and agile.”
Newly-launched regulatory FinTech sandbox in Taiwan
By launching its regulatory fintech sandbox in December last year for innovative financial services firms to experiment, Taiwan appears to have raced ahead in its vision of being an Asian FinTech hub.
Following the launch, the FSC expected 4,000 people to take part in the regulatory sandbox throughout its one-year duration according a report from the Taipei Times.
The first sandbox participant was KGI Bank, which was allowed to provide loans to clients online with the help of a mobile identity authentication technology in December last year in cooperation with Chunghwa Telecom.