Insurers need to face up to the task of building ‘digital trust’ between themselves and the consumers they serve, according to a new blog post from Moses Ojeisekhoba, CEO of Reinsurance at Swiss Re.
The post, ‘Why insurance leaders should care about digital trust’, refers heavily to work put out in recent days by the firm around its new Decoding Digital Trust: An Insurance Perspective report.
In his post, Ojeisekhoba writes: “The challenge for insurers is that fostering trust must be done on many levels throughout the whole value chain. AI is the next digital frontier. Machines are being programmed to both learn and to take decisions. It will affect everything from welcoming clients to underwriting decisions.”
He adds: “The potential benefits for insurers of AI are manifold. Success requires first winning the trust from our customers, regulators, and other stakeholders. Accomplishing this will require even greater transparency from industry participants. We need to be able to shine a light on digital black boxes, to explain and even challenge our algorithms.”
Ojeisekhoba said that he foresees ‘immense opportunities’ for insurers to build digital trust. But, at the same time, he maintains that they must content with the reality that they may abut some natural limit.
An example he gives is that of ‘the human touch’, writing: “Finding the sweet spot between automation and the human factor will hinge on trust. Automation and people must complement each other. While machines can make decisions, they remain machines. They cannot take responsibility; they are not accountable. Accountability must remain with real people, so that digital trust can flourish.”
As Reinsurance News reported on 19 May, thirty-page report, Decoding Digital Trust: An Insurance Perspective, provides a framework for understanding digital trust, highlighting its relevance against the backdrop of increasing digital automation, both in insurance and across other industries. The paper lays out a nine-step methodology – the digital trust pyramid – that explores digital trust solutions for companies.
The reinsurance giant divides the nine steps into three zones arrayed as a pyramid: the reliability zone, the security zone, and the reassurance zone. The first, says Swiss Re, “[provides] an infrastructure that allows reliable, cost-effective internet access; easy-to-use interfaces which enable better and easier decision making; overcoming cultural and societal resistance or reluctance in the face of digitalisation.”
The second, the security zone, allows users to “[…] feel safe and secure in exchanging data with other parties, both in how other parties use and secure personal data; and protection against theft and attacks by third parties.”
The reassurance zone, at the top of the pyramid, is about, “Creating trust in the ability of machines to reach decisions and conclusions autonomously; establishing social reactions with technology; and those areas of business and society that may remain human-to-human.”
The three assets of the reliability zone are access to internet and data, ease of use and accessibility, and cultural and general attitudes. In the security zone, it is data and cyber risk, data ethics and privacy, and security by proxy such as laws or kitemarks. The reassurance zone is made up of AI and automated decision making, empathetic and social AI, and human interaction.
However, writes Swiss Re Institute, “There is no single data point that can define digital trust. It is not a commodity to be bought, not an asset that can be traded, not a risk that can be underwritten. If trust has a value, then it is in the perceived strength of the relationship between the individual, business or institution and the party with which it seeks to interact. The notion of trust is, to a large extent, subjective and mutable, making it difficult to measure.”
