Realistic Process to Opening Up
The insurance industry traditionally and historically benefits from operating behind closed doors, using proprietary systems and custom data formats. The benefits are shrinking and have created silos and increasing inefficiencies, unnecessary costs, and risks.
Meanwhile, every other major global industry has discovered the opportunities and proven solutions of open-source software (OSS), technology, and collaborative governance models to accelerate innovation, improve security, and reduce expenses.
With the rapid rise of AI and digital transformation, insurers are dipping their toes into open data ecosystems—leveraging APIs, external data sources, and machine learning tools—yet they are hardly contributing leaders, the overarching benefit to leveraging open platforms; nor does the industry have paired open standards, enabling these emerging technologies and systems to be leveraged efficiently, safely, and truly effectively.
“Over many years, new industries and thousands of organizations have entered the open source ecosystem. In the early days, some organizations leapt into OSS without a proper strategy and an execution plan; they did not emerge as winners. Others took a deliberative approach that embraced OSS methodology and engineering practices; they came out as leaders for open source activities in their industries or verticals.” – LF Research Guide to Open Source
Global non-profit organization, the Linux Foundation ("LF") is the largest open source operating system in the world.
The LF is governed, run, and maintained by its members, some of which are the largest global corporations including (but certainly not limited to as there are 14 Platinum, 17 Gold, 1,208 Silver, and 319 Associate members): AT&T, AWS, Cisco, Coinbase, Ethereum, Fujitsu, Google, Hitachi, Huawei, IBM, Intel, Meta, Microsoft, Oracle, Qualcomm, Samsung, Tencent, and VMware. Over 850 open source projects, 17,000+ contributing organizations, 777,000+ developers contributing code, and 76,300,000+ lines of code added weekly, the LF has and continues to maintain the beat of the world’s technological heart, openly.
This “take but don’t give” approach comes at a cost: without clean, governed, and standardized data, insurers risk feeding AI models with messy, inconsistent, inaccurate, and even dangerous information that leads to flawed risk assessments, regulatory penalties, lawsuits, reputational blows, and financial losses.
Innovation impact and ability to securely and effectively generate scalable products, services, and implementation of technological advancements to match the times has also been stunted by the industry’s under-involvement in open platforms.
Opportunities to leverage cross-industry partnerships for access to more and better data and existing global cross-industry digital advancements (think: IoT, real-time data exchange, quantum computing, and optimized security…) has also been diminished by sitting in the bleachers of complacency and de facto loyalty to restrictive systems.
“Today, OSS powers the digital economy and enables scientific and technological breakthroughs that improve our lives [and business]. It’s in our phones, our cars, our airplanes, our homes, our businesses, and our governments.
Organizations involved in building [technology / software] products, regardless of their specific industry or sector, are likely to adopt OSS and contribute to open source projects deemed critical to their products and services.”
– Linux Foundation Research Guide to Open Source
The world is shifting toward data democratization, yet insurance companies continue to rely on outdated, closed systems that increase operational costs and slow down business processes. The industry’s long-held competitive advantage through exclusive data access is eroding, and those who fail to adapt will continue to face the increasing inevitable consequences.
The solution? A standardized, open, non-proprietary platform, and open governance approach to data. (Further information about this solution and approach)
Moving past current data standard and format reliances (holding the industry majority back from revolutionizing and innovating) will open doors to the next era of insurance data utilization.
Unfortunately, there has not been a solid and scalable alternative to build and host necessary participation and wide-adoption. This gap, the lack of a universal, non-proprietary insurance data standards-building platform, has now been solved with the inception of openIDS. 🚀
Next Step: Gather industry leaders to shape and build the new open standards!
Visit openIDL.org/openIDS/ to learn more
Explore or join our open Insurance Data Standards Working Group
openIDS is a standards building platform of openIDL, a Linux Foundation project.
Coming next: Why the Insurance Industry Needs Open Governance, the realistic approach to revolutionizing insurance data standards with open governance and a non-proprietary, open platform to collaboratively build