By Miles, the UK’s first pay-by-mile car insurance provider, announced that it has become the first UK insurtech to be directly authorised by the Financial Conduct Authority under Open Banking regulations.
With this permission, the company will be able to use APIs which grant access to a wider range of financial data. By Miles will using these to roll out its new payment services in the first half of 2020, which have particular applications to vulnerable customers.
James Blackham, co-founder and CEO of By Miles, says: “We’re always trying to find ways to make insurance fairer and more accessible. With Open Banking, we’ll be able to show that a customer has been able to make their regular insurance payments over the past year. This will mean drivers who could really benefit from the flexibility of a pay-by-mile policy can now be offered one, in instances where their traditional credit score might have suggested otherwise.”
It also means the car insurance provider will be able to start offering its members a more manageable way of paying monthly statements, as well as to reduce occurrences of fraud by automatically verifying a customer’s identity.
Blackham continues: “In a nutshell, this is what Open Banking and PSD2 (the EU Payments Services Directive) are all about. By giving individuals the ability to control the information associated with their accounts and initiate payments, third parties (including startups like us), can help them access better deals.”
“This is part of a wider trend of convergence between FinTech and InsurTech as we move towards a broader understanding of financial services.”
As part of the authorisation process, By Miles had to demonstrate its comprehensive approach to data security, which was successful in part to the company’s ISO 27001 Certification.
The FCA recently issued a call for input on proposals to extend Open Banking to other areas of finance, including insurance.
Blackham says: “The insurance industry has a lot to learn from Open Banking, particularly about becoming more open and transparent with customers. If they embrace this new world, insurance companies will be able to design more flexible products that are better tailored to the people that use them, and more people will be able to access them. If they don’t, they may get left behind.”