This March, The Fintech Times is shifting its spotlight towards insurtech, exploring the potential impact of blockchain technology on insurance processes and its role in instilling trust in digital transactions.

Navigating the intricacies of regulatory frameworks presents a formidable challenge for insurers operating on a global scale, as regional variations significantly influence their strategies and operations worldwide.

These regulatory disparities dictate product development, distribution methods, capital requirements, risk management practices, and market entry decisions.

To delve deeper into this, we consulted industry experts for their insights on how regional regulations shape insurers’ approaches and activities across diverse markets.

Unified approach

Regional variations in regulatory frameworks have significant impacts on insurtechs and insurers’ strategies and operations worldwide, says Caroline Hanotiau, general counsel at insurtech Qover.

“The operational complexity of managing compliance efforts and monitoring updates and changes in regulations can be resource-intensive. Additionally, stringent regulatory requirements in certain regions may act as a barrier to market entry, limiting potential expansions for insurers.

“Innovation can also be constrained by regulatory requirements in certain regions, which may restrict product development and distribution rules.

“However, at Qover, we have developed a unified API that allows us to navigate these challenges and ensure compliance across all countries, while still innovating and providing consumer protection.”

Central bank regulation

Mustafa Melhem, business development manager for insurance at Eastnets, a global provider of compliance and payment solutions for the financial services sector, addresses the importance of central bank regulation in fostering stability and mitigating fraud in well-regulated insurance markets.

“In many regions, the insurance sector is regulated directly by the central banks through a dependent or independent insurance authority. We consider these regions as well-regulated insurance markets.

“They offer a strong and stable insurance market, empower the local insurance sector, foster better partnerships with the global reinsurance and financial sectors, and protect policy holders and beneficiary rights.

“These markets also offer protection of any third parties’ rights, such as healthcare providers and other insurance service provider. They also empower the insurance companies’ solvency margins and ensure strict control of fraud and money laundering.

“In other regions, where the insurance sector is reporting to different governmental departments or ministries, the central banks are not fully involved and therefore these regions are poorly regulated. So, these markets are lacking the above benefits, which encourages increased fraud.”

Robust IT systems

“Insurers are, and have always been, under enormous pressure to make their products conform to the regulatory needs of every geography they serve,” says Sam A. Shay, creative director at Socotra, which provides a modern enterprise platform  to insurance businesses.

“Even a small insurer that sells only one basic personal auto product in the U.S. has to create a variant of that product for each state, greatly increasing the complexity of doing business across any kind of border. The resulting amount of compliance work, product definition and more that goes into growing into larger regions or offering a more expansive product portfolio can be incredibly cumbersome.

“The insurers best-poised to handle this are the ones that use IT systems with robust insurance product inheritance models that allow them to easily configure each of their products to suit every regulatory environment the product is offered in – rather than offering unique products for every geography.”

Managing compliance

“Regulatory differences significantly shape the strategies and operations of global insurers, influencing product development, distribution methods, capital requirements, risk management, compliance, and market entry, including mergers and acquisitions (M&A),” says Ryan Cox, senior director and head of AI Business at digital transformation consulting firm Synechron.

“Insurers must customise their products to comply with various regulations, align distribution strategies with legal frameworks and maintain adequate capital to meet solvency requirements. They also need region-specific risk management strategies to navigate varying compliance standards and associated costs from one region to another.

“Market entry decisions hinge largely on regulatory landscapes, with insurers preferring markets with more favourable regulations while acknowledging regulatory challenges.

“M&A activities require thorough assessment of regulatory impacts and approvals across jurisdictions. Despite regulatory complexities, insurers can find opportunities by proactively managing compliance, maintaining operational flexibility, and using technology to enhance regulatory processes’ efficiency.”

Adaptable strategies

Highlighting the dynamic impact of regional regulatory variations on insurers is Javed Akberali, co-founder and managing director of insurtech Wellx, who said:

“Regional variations in regulatory frameworks significantly impact insurers’ strategies and operations worldwide. Differences in data protection laws, licensing requirements, and compliance standards require insurers to adapt their business models and strategies to each jurisdiction.

“This variation necessitates a flexible, informed approach to global insurtech operations, underscoring the importance of understanding and navigating these disparities to succeed on the international stage.”

Topic authority is recognized expertise on a given subject. A company, publication, or person can possess it.

In May, Google published an article in its Search Central Blog titled “Understanding news topic authority.” The article explains how Google assesses expertise for responding to News and Search queries.

Here’s what we know about topic authority and its impact on rankings.

Topic Authority, per Google

The May article listed Google’s prominent signals for topic authority.

• How notable a source is for a topic or location. 
• How original reporting is cited by other publishers
• A source’s history of high-quality reporting or recommendations from expert sources, such as professional societies.

In other words, the primary signals are:

• A source’s location (e.g., a local news site) or evidence of expertise (a knowledge panel).
• Links from other trusted publications.
• Connection to other trusted entities — awards, professional associations, more.

Google’s Nov. 2023 edition of Search Quality Rater Guidelines (PDF) refers to topic authority many times. For example, the guidelines explain why “Marriott” ranks prominently for a query of “hotels”:

Page Quality. The Marriott website gives information on Marriott Hotels, a popular chain. Marriott has a good reputation and is an expert on hotels, making the information on this page highly authoritative. High+ to Highest is an appropriate rating.

The guidelines also suggest checking the backlinks of higher-ranking pages.

Thus the Search Central Blog article and Quality Rater Guidelines both suggest Google’s requirements for top rankings:

• Reputation as a trusted resource,
• Recognizable brand or entity within that niche,
• References (links) from trusted sources such as Wikipedia, professional news outlets, more.

In 2013 Google obtained a U.S. patent (PDF) called “System and method for determining topic authority.” It identifies key factors of any web page for assigning expertise on a topic, which the patent calls the “authority signature value.” The patent states that authors’ expertise grows as they publish more articles on that topic.

Searching Google helps understand topic authority. For example, a query of “ann smarty” produces my knowledge panel with associated entities (“People also search for”) and my “Articles” in Google News.

Google’s image search also reveals how it classifies a source. An image search for “ann smarty” reveals multiple associations, including:

• “internet marketing,”
• “seo analyst,”
• “interview,”
• “marketing ninjas,”
• “blogger.”

Hence topic authority is a collection of signals (on-site and off) that help Google identify expertise and trust for a query.

Establishing Authority

To establish topic authority:

• Publish consistent content on your area of expertise. Cover all angles, problems, and solutions. Use internal links to help Google find the pages and associate them with your company or authorship.

• Obtain links to your content from trusted resources. Connecting with journalists and posting on social media can put your content in front of authoritative publications and personnel.

• Deploy Schema.org markup to assist Google in understanding your expertise. Use “knowsAbout” and “sameAs” properties in the “Person” or “Organization” types to point Google to relevant external channels, such as a Wikipedia page on your topic.

Overall, connecting with other known entities is a good way to become trusted by Google. For example, search for an event name when considering sponsoring or speaking at it. Does it trigger a knowledge panel? Perform the same search for a potential brand collaboration.

If you’re aiming for prominent rankings, Google’s assessment of authority matters.

In June 2023, the Atlantic Council, based in the United States, announced the results of a study on global nations’ interest in and progress toward creating their own central bank digital currencies. Eleven countries have already launched CBDCs; 130 others are in the exploratory phase, and about half of those have begun the development process. 

Market watchers cite multiple factors behind governments’ push toward CBDCs, from the decreasing use of cash by the general population to geopolitical tensions and events. Whatever the underlying reasons, though, crypto industry players need to keep an eye on developments and consider how the rise of CBDCs could impact the industry and global marketplace. Here, 11 members of Cointelegraph Innovation Circle share their predictions for possible outcomes from the ever-expanding development and introduction of CBDCs.

A boost in the uptake of cryptocurrencies

CBDCs manifest the “if we can’t beat them, join them” attitude of governments in response to blockchain technology. In the short to medium term, CBDCs could help legitimize crypto but struggle to compete in utility and benefits, likely leading to a boost in the uptake of cryptocurrencies. In the long term, governments may attempt to stealthily “phase out” crypto as CBDCs mature and gain relevancy. – Sheraz Ahmed, STORM Partners

Deepened importance of decentralization

CBDCs are still largely unknown territory. The risks to personal freedoms are real. A potential crypto industry impact is the deepened importance of decentralization, privacy and other forms of the human rights of freedom and self-determination. – Tiago Serôdio, Partisia Blockchain

Tighter regulations

The rise of CBDCs may validate blockchain technology and cryptocurrencies, boosting public familiarity with and acceptance of digital assets. However, this could also bring tighter regulations, impacting existing crypto market dynamics. It’s a delicate balance between validation and regulation. – Tomer Warschauer Nuni, Kryptomon

Recognition of stablecoins as CBDCs

CBDCs are an almost inevitable game theory of governments trying to copy or provide an alternative to decentralized money, but with government trust anchoring the confidence. With USDC and USDT being backed by bonds now through BlackRock, I would say that the USD-based stablecoins that are prevalent are already a form of CBDC, since governments can monetize and mint digital USD through debt. – Jagdeep Sidhu, Syscoin Foundation

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Cryptocurrencies being viewed as competition

The rise of CBDCs could have both positive and negative impacts on the crypto industry. One con could be that governments might perceive CBDCs as competition to private cryptocurrencies. However, on the other hand, CBDC adoption plays well for the larger narrative of the adoption of blockchain technology and cryptocurrencies. – Abhishek Singh, Acknoledger

A bridged gap between Web2 and Web3

CBDCs could help bridge the gap between Web2 and Web3. If they are allowed to coexist with crypto, CBDCs can actually reduce friction between the traditional finance and decentralized finance worlds. For example, these new payment systems could serve as an on- and/or off-ramp for people trying to convert fiat into crypto. So instead of killing crypto, CBDCs could actually help Web3 become more accessible than ever. – Wolfgang Rückerl, ENT Technologies AG

New curiosity about other crypto offerings

While there’s much anxiety about the development and rollout of CBDCs, industry leaders should embrace their inclusion as a new avenue for entering the DeFi space. The normalization of crypto by governments could inspire otherwise reluctant participants to develop curiosity about other offerings available throughout the space. Then, the true test for CBDCs can become how they survive the free market. – Oleksandr Lutskevych, CEX.IO

A more diverse product landscape

CBDCs are a double-edged sword, because while they drive the adoption of digital currencies, they do so at the expense of sacrificing a core value proposition of cryptocurrency: decentralization. It is unrealistic to assume CBDCs will not emerge, since many on-chain products are needed to ultimately build out a diverse landscape of products that can serve all levels of consumers. – Megan Nyvold, BingX

More access to financial services for the unbanked

Increased financial inclusion and credit access for the unbanked population is one valuable utility of CBDCs, since non-bank payment system providers can distribute CBDCs, eliminating the need for a traditional bank account. The rise of CBDCs would allow individuals without bank accounts to build credit and access lower-interest-rate loans if CBDC data is shareable with banks. – Vinita Rathi, Systango

Heightened focus on existing cryptocurrencies

CBDCs will lead to a heightened regulatory focus on the crypto industry. As central banks begin to explore CBDCs, they will also be conducting research and risk assessments on the existing crypto ecosystem, which could lead to policy changes. Experts debate CBDCs’ impact on anonymity and decentralization while acknowledging their role in mainstream adoption and familiarity with digital currencies. – Anthony Georgiades, Pastel Network

Nothing of significance

I see no material effect; it’s net-neutral, in my opinion. Although CBDCs further legitimize blockchain technology, to a degree, that is offset by the fact that the CBDCs will run on private blockchains (such as Hyperledger), where there is no need for a token. On the fringe, maybe it pushes a few skeptics over the edge in terms of validating the space. – Timothy Enneking, Digital Capital Management

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This article was published through Cointelegraph Innovation Circle, a vetted organization of senior executives and experts in the blockchain technology industry who are building the future through the power of connections, collaboration and thought leadership. Opinions expressed do not necessarily reflect those of Cointelegraph.

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