The insurance industry has reached an evolutionary crossroad. The fast-evolving world of InsurTech mandates that insurers become digitally agile. With Fintech solutions becoming more common, a responsive approach would enhance the ability of promising insurance innovations to develop and flourish.
There are various technologies stepping into the value chain to enhance and disrupt the way insurance businesses used to function earlier. The industry should consider testing their products in a controlled environment or a ‘Sandbox’. This approach can provide certain advantages such as allowing insurers to launch unconventional products on a pilot-basis before seeking necessary approval.
A sandbox approach in insurance can be used to carve out a safe and conducive space to experiment with innovative Insurtech solutions. It is a process of experimenting on a limited scale initially, where the consequences of failure can be contained before finally being adopted; consequently not allowing regulation in being a constricting force in their innovation journey.
Sandbox approach, a global affair:
Implementation of the sandbox to test customer’s interest is now a global call. It is being implemented in most region’s financial hubs including UAE, Australia, Canada, Hong Kong, Malaysia, Singapore, Switzerland, and the UK.
The FCA (Financial Conduct Authority) the UK, the British financial regulator was the first to launch the Fintech sandbox, back in