Why Open Finance Matters for Insurance

R Philip • November 13, 2025

Key Points


  • Research suggests Open Finance in the UAE is advancing, with regulations including open insurance, impacting the sector significantly.
  • It seems likely that insurance will participate by sharing data via APIs, enhancing innovation and customer services.
  • The evidence leans toward new ventures, customers, brokers, and insurers facing both opportunities and challenges, like data security and competition.


Overview of Open Finance in the UAE


Open Finance in the UAE is part of the Central Bank's Financial Infrastructure Transformation Programme, launched to enhance digital financial inclusion. The Open Finance Regulation, issued in 2024, establishes a framework for cross-sectoral data sharing and transaction initiation, including both open banking and open insurance. This positions the UAE as the first globally to implement a consolidated trust framework and centralized API hub, with implementation phased and majority customer access expected by 2024, fully integrated by 2026 .


Insurance Industry Participation


The insurance industry is required to participate by providing API access and sharing data with accredited third parties, as part of the first implementation phase by June 2024. Insurance companies and brokers are deemed licensees, needing UAE Central Bank approval, which could lead to innovative digital products and enhanced customer control over finances .


Survey Note: Comprehensive Analysis of Open Finance in the UAE Insurance Market


Introduction


Open Finance represents a transformative shift in the financial services landscape, enabling secure data sharing across sectors with customer consent. In the UAE, the Central Bank's Open Finance Framework, launched in 2024, encompasses both open banking and open insurance, positioning the country as a global leader. This note provides a detailed analysis of the current state of Open Finance in the UAE, its implications for the insurance industry, and actionable insights for mid-size insurance brokers, drawing on international examples from the UK and EU.


Regulatory and Market Context in the UAE


The UAE Central Bank's Open Finance Regulation, issued on June 27, 2024, is part of the Financial Infrastructure Transformation Programme, one of nine initiatives to drive digital transformation in the finance sector . This framework includes a consolidated trust framework and centralized API hub, facilitating a single secure connection for banking and insurance markets, with customer consent and CBUAE-regulated third parties . The phased implementation began with Open Banking, followed by Open Insurance, aiming to reach the majority of customers by 2024 and fully integrate by 2026.

The regulation mandates that financial institutions, including banks, insurance companies, and payment service providers, allow accredited third-party providers access to financial data, requiring all CBUAE licensees to comply with data sharing and service initiation requirements . Insurance companies and brokers are deemed licensees, needing UAE Central Bank approval, with entities in financial freezones like Abu Dhabi Global Market and Dubai International Financial Centre exempt unless conducting onshore services, then requiring an Open Finance Licence.


Insurance Industry Participation


The Open Finance Framework incorporates open insurance, requiring insurance companies (national and foreign branches) to provide API access by June 2024 as part of the first phase . This involves integrating with the central platform, Nebras Open Finance, approved in December 2024, which supports consent management, support, analysis, and dispute resolution . The participation is expected to enhance digital financial inclusion, provide innovative and safer digital products, and ensure consumer control over finances, as stated by Fatma Al Jabri, Assistant Governor for Financial Crime, Market Conduct and Consumer Protection at the CBUAE .


Implications for the Insurance Value Chain


The Open Finance Framework has profound implications for various stakeholders:


  • New Ventures: Startups and fintech companies can leverage open insurance to develop innovative products, such as embedded insurance or data-driven risk assessment tools, by accessing insurance data through APIs. This aligns with global trends, such as the Open Insurance Initiative Network (OPIN) with 61 companies involved . However, they must navigate regulatory compliance and build trust with customers.
  • Customers: Customers gain greater control over their insurance data, enabling sharing with third parties for tailored services, better pricing, and improved experiences. Open finance facilitates easier comparison and switching, potentially reducing costs, but requires education on data privacy and consent management to ensure informed decisions .
  • Brokers: Mid-size insurance brokers can offer more comprehensive services by aggregating data from multiple insurers, enhancing advice and personalized recommendations. Partnerships with fintechs can improve digital capabilities, but compliance with the framework requires investment in API integration and data security .
  • Insurance Companies: Insurers must invest in technology to comply, potentially leading to operational efficiencies like faster processes and improved risk underwriting. New business models, such as insurance-as-a-service or platform strategies, can emerge, but there is a risk of losing direct customer relationships to third-party providers .
  • Other Participants: Third-party providers, including fintechs and Big Tech, can enter the market more easily, potentially disrupting traditional players. Big Tech, like Tesla planning to become an insurer, may leverage product data, posing competition risks .


International Insights: UK and EU Examples


The UK and EU provide valuable lessons for the UAE:


  • UK: Open finance has been under consideration since 2019, with the FCA and government working on frameworks including insurance under the Data Protection and Digital Information Bill . Impacts include potential for tailored services, but challenges include consumer protection and regulatory clarity. The pro-competition stance suggests data sharing could drive new offerings, with risks of marginalization for traditional firms .
  • EU: The Financial Data Access (FIDA) framework, proposed in June 2023, covers non-life insurance data, excluding life, sickness, health, and creditworthiness data, with permission dashboards and standardized infrastructure . This can enhance innovation but is limited in scope, with additional safeguards for data protection. Research suggests operational efficiencies and customer experiences improve, but risks include data sensitivity and Big Tech dominance .


Detailed Implications and Challenges


The research highlights key dimensions of openness, including data (proprietary, risk-related, third-party), product (insurance, risk-related services, beyond insurance), and ecosystem (channels, embedded insurance, platform strategies) . Performance impacts include:

  • Operational Efficiencies: Faster process cycle times, improved risk underwriting, reduced claims costs, better coordination across 30 European countries for large insurers.
  • Customer Experiences: Integrated experiences, new revenue streams, easier comparison/switching, personalized services, potentially transforming insurer-customer touch points.
  • Third Parties: Tailored products/pricing for intermediaries, Big Tech, InsurTech; partnerships as competitive advantage, but risks of commoditization and winner-take-all dynamics.



Challenges include sensitivity of risk data, ethics/norms for data exchange, powerful insurers impeding progress, lack of data reciprocity, and potential loss of customer interface, with time horizons varying from 5 years (innovation phase) to 25 years (due to industry inertia) .


Actionable Recommendations for Mid-Size Insurance Brokers


Given the current state as of May 29, 2025, mid-size insurance brokers in the UAE should:

  1. Assess Current Capabilities: Evaluate technology and data management systems for open finance compliance, investing in API integration and data security .
  2. Develop Partnerships: Collaborate with fintechs and insurtechs to enhance digital offerings, exploring embedded insurance or data analytics .
  3. Enhance Data Security: Ensure compliance with UAE data protection regulations, implementing robust cybersecurity measures .
  4. Educate Clients: Inform clients about open insurance benefits, such as personalized products, and provide transparency on data usage .
  5. Stay Informed: Monitor regulatory developments and participate in industry forums to stay ahead .
  6. Leverage Open Data: Use data for personalized offerings, improving underwriting and claims processes .
  7. Explore New Business Models: Consider embedded insurance, partnerships with non-traditional players, and new revenue streams like data analytics .


Conclusion


The Open Finance Framework in the UAE offers significant opportunities for the insurance industry, enhancing innovation and customer empowerment, but also poses challenges related to compliance, data security, and competition. By learning from the UK and EU, and implementing strategic actions, mid-size insurance brokers can navigate this landscape, delivering value to clients and staying competitive in a rapidly evolving market.


Key Citations



By R Philip March 18, 2026
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