Cultivating trust in an increasingly digitalized world

In an increasingly digitized world, the concept of trust has become more widespread, especially since we have begun to understand the importance of proper behavior that must be combined with better efficiencies. For the insurance industry, and especially in its risk management segment, digital trust is very important, because the idea of ​​this concept provides what could be the backbone of the segment.

“Digital trust refers to the level of trust customers have in an organization’s ability to protect and responsibly use their personal data in a digital environment. This concept is becoming more important every day life as technology advances,” said Daisy Ning (pictured above), Swiss Re head of life and health reinsurance for APAC ex. China.

In a conversation with the Insurance Business’ Corporate Risk channel, Ning explained that this concept is incredibly integral because the industry relies heavily on the exchange of personal data between parties. Security for this data is paramount, and trust can only be built as long as its safety is guaranteed. With new technologies at everyone’s fingertips, the threats and dangers posed by cyber crimes are also on the scale, and Ning urges everyone to pay attention to the “ethical and legal complexities ” – the alternative is loss of trust and damage to reputation.

“It’s not just about efficiency; it is also about being responsible and transparent in the journey,” he said. “If we look at it in the context of digital underwriting, there is a significant opportunity to strengthen digital trust, while also changing the insurance process. By using advances in AI and -on the machine, as an industry we can further automate the underwriting process, increase efficiency, reduce human error, and provide a faster, smoother experience for customers.

Citing his home turf as an example, Ning explained that there has been significant progress in the use of automated underwriting machines to process first-level and second-level medical evidence, a breakthrough in the field. These efficiencies allow insurers to make more accurate risk assessments and price policies more fairly, in addition to a better customer experience for insureds across the region, thus closing the gap to protect.

“The shift towards digital underwriting also promotes greater transparency. This transparency not only strengthens trust, but also leads to more personalized and fair insurance products,” said Ning. “But insurers must remain vigilant about data privacy and security; ensure transparency to customers about how their data is used. By doing so, the industry can build digital trust and strengthen customer relationships in the digital age.

There is a place for tradition

Despite the growing scale of digitalization, Ning said there is still a place and time for industry tradition, which often comes in the form of personal, face-to-face, and agent-based transactions.

“A large part of customers prefer and appreciate the personal touch and the security that comes with face-to-face interactions. This is especially evident when dealing with complex policy matters, where customers may find discussing their needs and concerns in person more comforting,” he said.

Describing the industry as a spectrum with many customer preferences, needs, and comfort levels with technology, Ning said a diverse approach is always best. Insurers, therefore, need to be efficient in their efforts to offer different and personalized policies that are most effective to different types of policyholders.

“As an industry, we must continue to innovate, and take advantage of the opportunities offered by digitalization, while still respecting traditional service preferences,” Ning said. “The most promising approach seems to be a hybrid model that combines the benefits of both digital and traditional methods, offering the efficiency of online transactions together with the comfort of personal service, thus serving many customer expectations.”

These considerations also apply to underwriting, Ning said, especially with fears of artificial intelligence eventually replacing workers with unmatched efficiency. While machine learning and AI are crucial to automating many aspects of the field, human expertise will remain essential to the process.

“While computers can streamline the process and improve efficiency, they cannot completely replace human underwriters. Our innate human abilities to empathize, negotiate, and create knowledge that judgments continue to be important,” Ning said.

In the future, as we evolve these technologies, Ning predicts a certain evolution of the underwriting role that takes a more managed approach, one that requires proper judgment and expertise. He also emphasized that digitalization should not be considered a strict replacement, but – as an industry veteran put it – a tool that can improve and increase their capabilities.

“The future of the insurance industry is not about making a choice between digital and traditional methods but making the two compatible. Insurers who achieve this balance will be able to take care of the needs of those customers and build trusting, long-lasting relationships,” he said.

Making AI more reliable

Part of developing digital trust in today’s landscape requires companies to try to make certain technologies more reliable, especially for risk managers and insureds. As AI continues to gain traction in insurance, Ning said there is one important aspect that needs to be met to make it as valuable a proposition as possible.

“To fully utilize these benefits, AI must gain the trust of policyholders,” he said. “Swiss Re’s proactive participation in the Veritas initiative, a project led by the Monetary Authority of Singapore (MAS), proves this. The initiative aims to promote fairness, ethics, accountability, and transparency in AI and data analytics, which is in line with Swiss Re’s commitment to the development of responsible AI.

Part of the Institute’s recent report on the reinsurer also provides insights into how companies can achieve digital trust in a pervasive AI space. Ning cited the concept of “explainable AI” (XAI), which could be a “game-changer” in the right hands. This concept calls for making AI-driven decisions easier to understand, in addition to making things clearer for clients and in the process increasing their confidence in the fairness and accuracy of the system.

“Another method, mobile ethnography, allows us to better understand customer behavior. Using mobile technology, we can study how people behave and feel about AI. This real-world insight helps to design digital insurance products that are easy to understand and aligned with customer values,” Ning said.

“While AI presents great potential for the insurance industry, its successful implementation depends heavily on building and maintaining digital trust. Using technology like XAI and mobile ethnography can make the digital shift smoother and strengthen customer relationships,” he said.

The second part of Daisy Ning’s conversation on Insurance Business Corporate Risk will be published in the coming weeks. Watch out.

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