Swiss Re’s latest SONAR edition has identified eroding consumer trust in governments, public health institutions and medical science as an emerging risk. It also highlights that this lack of trust is inevitably spilling into how consumers view insurers.
In times of crisis – the ongoing Covid-19 pandemic, the war in Ukraine, emerging global inflation and the ever-present dangers posed by climate change – people’s resiliens is tested, and they tend to undermine public trust, including governments, institutions, medical science business and the insurance industry, Swiss Re stated.
For example, according to the SONAR report, mistrust in public health officials and medical professionals fosters harmful behaviours and increases the risk of higher morbidity and mortality, particularly in future health crises. In addition, the insurance industry could also be impacted.
According to Winnie Ching, CRO Re Asia & Head Risk Mgmt Re L&HView profile of Winnie Ching, in order to mitigate this emergency risk, insurers can play a role in boosting consumer trust as partners to health institutions and individuals. Their role in pricing risk and providing risk information also is vitally important in strengthening resilience against future health crises, she noted.
When this year’s SONAR was launched, Ching hosted an APAC webinar to mark the 10th anniversary and asked the panellists what insurers could do to build trust with consumers more broadly.
James Turner, Group CFO at Prudential, said the claims process mattered the most.
“For insurance companies, a claim is the moment that matters and having confidence as a customer, that is that moment that matters,” Turner said. “It is important that we have established, highly capitalised, resilient insurance companies that are going to be there to pay out your claims – that is key.”
Another key factor to building trust is strong government regulation to protect consumers, Ching pointed out.
Turner added: “Look at countries like Indonesia, they are introducing new regulations on index-linked products, on savings products, so that the people who are putting out products that are inappropriate are removed from the market.”
“In China, we’ve seen a raft of regulation on data protection, on how products are sold. That is all about building trust for consumers in insurance products, so that they recognize the importance of having that protection.”
Swiss Re’s Group Chief Risk Officer Patrick Raaflaub warned that the increasing use of technology to manage risk by collecting data through apps could undermine consumer trust.
Raaflaub argued that technology was “too often used as an excuse for not providing transparency” which undermines trust building. What was required was “radical transparency”. He added: “We have to always be in a position to explain what we do and why.”
In this regard, Ching concluded, it is essential that regulators continue to engage with the industry to develop standards for what constitutes responsible use of data. For example, in Singapore, Swiss Re has been working closely with the Monetary Authority of Singapore in the development of fairness and transparency metrics to assess whether the underlying model’s use and output are fair and transparent to consumers.
Ching said: “I think such collaborative efforts will be key in developing insurance solutions and building consumers’ trust.”
