INSURANCE EU

Insurance Europe’s annual conference: Finnish insurance CEO concerned over data use restrictions

FINANCE FINLAND

OP Financial Group's President and Group CEO Timo Ritakallio was interviewed by Director General Michaela Koller at Insurance Europe’s annual conference in Helsinki. PHOTO: TIMO MARTTILA
  • Too strict regulatory restrictions on data use can hinder the insurance sector’s competitiveness and the EU’s economic competitiveness.
  • The amount of regulation is constantly growing. Supervisory expectations are also increasing, often without a clear regulatory basis.

OP Financial Group’s President and Group CEO Timo Ritakallio was interviewed at Insurance Europe’s 14th annual conference in Helsinki at the end of May. The event drew 320 attendees from all across the world.

“We are slightly worried whether data regulation will leave enough room to use data and secondary data in the best way from the customer’s point of view. This should be discussed more on both the regulatory and the supervisory level”, says Timo Ritakallio, OP Financial Group’s president and group CEO. Ritakallio was interviewed by Director General Michaela Koller at Insurance Europe’s annual conference in Helsinki.

Data is key in the insurance business. Companies utilise data extensively in customer understanding and risk management as well as to provide fair and accurate pricing, improve productivity, enable effortless processes and develop better, faster services. However, global digitalisation and related progress such as the open data framework and the generative AI revolution are making data use an increasingly complicated question. Consumers have also justifiably become more nervous and protective when it comes to granting access to their data. This makes transparency and responsibility all the more essential.

“It’s really important that we can really use this data so that it is in the best interest of our customers. Data and generative AI make it possible to provide more personalised products and services to our customers”, Ritakallio says. According to Ritakallio, the sector is currently right in the middle of this technological revolution, and it is difficult to predict the impacts of future regulation on the outcome.

“Still, I see more opportunities than threats in this field”, assures Ritakallio. “To be a trusted company you must be trustworthy also when it comes to the use of customer data.”

What is the legal basis of supervisory expectations?

The regulatory tsunami that swept the world in the wake of the global financial crisis did not affect only the banking sector but the insurance sector as well. New regulation is not just more paper: it means more work in the form of additional bureaucracy and more reporting requirements, for example.

“On top of this, supervisory expectations are also increasing, sometimes without a clear regulatory basis. This is a problematic situation from the viewpoint of the supervised companies. I have understood that the next EU Commission will, hopefully, try to figure out how to stop this increase in regulation and reduce the amount of reporting requirements”, says Ritakallio.

EU regulation must be competitive also outside of Europe

Easing the burden of regulation and reporting requirements is significant also in terms of competitiveness: it will enable the provision of more affordable services while still maintaining high quality.

The importance of competitiveness will only increase, and the insurance sector needs economic growth. This growth should not be hampered with unnecessary obstacles. Ritakallio notes that politicians are, fortunately, realising that the volume of EU regulation has grown almost untenable.

“The whole time we’re trying to solve different problems with regulation. The ‘one in, one out’ approach to regulation and reducing the amount of different reporting requirements is key”, he says. “It’s important to understand that our main competitors are outside, not inside of Europe!”