InsurTech weekly - A new wave is taking shape

While AI dominates the headlines, there are other tech trends revamping Financial Services.

That's how I would summarize this week's wrap-up.

The first article from Plug&Play explores the Open insurance initiative in Europe. It begins with an overview of the trend, outlines the opportunities for incumbents, and highlights startups already creating value in this space.

The second article is a report by BCG and QED Investors, examining the current state of the fintech industry and the major trends shaping it. It also outlines future expectations for industry players and emphasizes the importance of incumbents embracing technology to remain competitive against emerging startups.

The third article is an essay from Sequoia Capital on the market requirements for artificial intelligence, as investments in startups and hardware components continue to surge. It analyzes major trends shaping the industry and the challenges that must be overcome to make AI a groundbreaking technological wave.

_{Where does Open Insurance stand in Europe?}

With the proposed Financial Data Access (FiDA) regulation, open insurance nears reality in Europe. Part of the broader open finance concept, it puts the insurance industry on the precipice of a significant transformation. Customers (B2B and B2C) will be in control of their data. Their informed consent is needed to share data. This urges incumbents (data holders) and other players (data users) in the insurance sector to start preparing for the new reality by adjusting their operations to new data usage and sharing practices in schemes that need to be developed. FiDA will bring huge benefits to customers and the industry.

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_{The state & future of FinTech}

The global fintech market remains a hotbed of innovation and growth, despite a sobering few years in funding and valuation terms. And there is so much more room for growth. With the advent of game-changing technologies such as GenAI and with still billions of unbanked and underbanked individuals worldwide, fintech has vast potential. We (BCG) continue to expect fintech to reach a market size of $1.5 trillion in revenue by 2030—growth of roughly five times from today.

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_{The unit economics of Generative AI}

One of the major rebuttals to my (David Cahn) last piece was that “GPU CapEx is like building railroads” and eventually the trains will come, as will the destinations—the new agriculture exports, amusement parks, malls, etc. I actually agree with this, but I think it misses a few points.

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