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Insurtech Australia has given up on its push to get Australia’s corporate regulator ASIC to expand its regulatory sandbox – which allows fintechs to test certain specified services without needing to hold an Australian financial services licence or credit licence.
The lobby group said the sandbox is “mostly unviable” for those hoping to set up businesses for the insurance sector.
“The sandbox does not hold a lot of value for the vast majority of, if not all, insurtechs in its current state and it doesn’t look like it’s going to evolve any further unfortunately,” Simon O’Dell, Insurtech Australia chief executive, told The Australian Financial Review. “We retain a determination that the status of the sandbox is poor in its utility.”
In 2016, ASIC revised its regulatory sandbox policy, allowing some fintechs to test financial products and services with up to 100 retail customers a year without having to get a license. ASIC said in December it would not revise its regulatory sandbox proposal.
Insurtech Australia, a standalone division of Fintech Australia, has proposed extending the 12-month testing period to 24 months, and increasing the restriction on the number of clients from 100 to 200.
Global investment in insurtech saw a major improvement last year – up from $1.7 billion in 2016 to $2.6 billion. But of this figure, only about 1% made its way to Australian start-ups, AFR reported.
