COLOMBIA Law and Practice Contributed by: Rebeca Herrera Diaz, Rebeca Herrera Abogados
technology enterprises to optimise product devel- opment processes, ensuring more precise pricing and better service delivery. Others have launched their own insurtech ventures to strengthen their presence in the digital marketplace. These initia- tives offer innovative and personalised solutions to meet evolving customer demand. Collaborations between traditional insurers and insurtech start-ups in Colombia encompass devel- oping new insurance products, distributing insur- ance services, and optimising processes. In terms of product development, insurance companies have collaborated to create tailored insurance products that leverage data analytics and artificial intelligence. Digi- tal platforms enhance customer reach and streamline policy issuance, and technology has also improved underwriting, claims processing, and customer ser- vice. These collaborations have led to the development of products such as usage-based insurance, microinsur- ance, and on-demand policies, which cater to diverse customer needs and promote financial inclusion. Overall, integrating technology in Colombia’s insur- ance sector fosters innovation, enhances customer experiences, and expands market reach through strategic partnerships and the development of new products. Currently, the Colombian Congress is assessing two bills that seek to regulate artificial intelligence in line with European principles. 10.2 Regulatory Response The SFC has actively addressed the rise of insurtech by implementing several measures to foster innova- tion while ensuring consumer protection and finan- cial stability. Colombia has adopted a sector-specific regulatory approach for fintech and insurtech, avoid- ing a single “fintech law”. This strategy allows for tai- lored regulations across various segments, including insurance technology, facilitating innovation without compromising oversight. To facilitate innovation, the SFC established the Inno- vaSFC group to promote technological advancements
in the financial and insurance sectors. This initiative supports entities in developing innovative models and adapting to technological changes. Through the Regulatory SandBox, the SFC provided a controlled environment for testing innovative financial and insurance products and services. This framework enabled insurance companies to experiment with new models under regulatory supervision, ensuring com- pliance and consumer protection. Decree 1297 of 2022 of the Ministry of Finance and Circular Externa 004 of 2024 of the SFC outlined guidelines for the implementation of open finance and the commercialisation of technology and infra- structure by regulated entities. This circular promotes data sharing and collaboration between traditional insurers and insurtech firms, fostering innovation and competition. Although these measures reflect Colombian regu- lation and the SFC’s proactive stance in balancing the promotion of technological innovation within the insurance sector, Colombian regulation focuses on maintaining robust regulatory oversight to protect consumers and ensure market stability. This focus can present challenges for insurtech developments, particularly when addressing AML requirements and KYC obligations. 11. Emerging Risks and New Products 11.1 Emerging Risks Affecting the Insurance Market The Colombian insurance market is confronting sever- al emerging risks, including cyber threats, new catas- trophe risks, advancements in artificial intelligence (AI) and automation, and increased longevity. The rise in digitalisation has increased exposure to cyberattacks, data breaches, and operational disrup- tions. The SFC has issued guidelines mandating finan- cial institutions, including insurers, to establish robust cybersecurity frameworks. These frameworks include risk assessments, incident response plans, and con- tinuous monitoring to safeguard sensitive information and maintain operational integrity. External Circular
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