Digitalisation across the re/insurance value chain is accelerating. It is expected that this will enhance the value provided to customers and help close protection gaps. Thus, it is important to actively promote digitalisation. However, the use of artificial intelligence and digital personal data also raises ethical concerns regarding fairness, inclusion, hardship and solidarity. In this context, we have started to develop our own ethical guidance to enable swift digitalisation at Swiss Re, while at the same time ensuring that we maintain customers’ trust, differentiate our services and safeguard our reputation as a leading re/insurer.
Various regulators around the world have started to evaluate the need for regulations on the topic of big data/digital ethics or have issued initial guidelines. Swiss Re actively engages in discussions with regulators by participating in regulatory expert groups, contributing to studies and reports, as well as giving feedback to consultations and responding to regulatory questionnaires.
Swiss Re’s internal governance also recognises that while technology offers many business opportunities, it also creates new risks. Digital governance requirements are increasing in both number and complexity. However, fragmentation and, as a result, partially uncoordinated governance approaches make it difficult for owners of digital services to navigate these requirements.
To avoid Swiss Re having to choose between fast and compliant tech innovation, we have developed our Digital Governance Framework (DGF). It aims to balance the needs for fast business innovation and effective risk management. Designed to be comprehensive, risk-based and user-friendly, it makes requirements transparent and positions governance as a fundamental pillar of digitalisation.
The DGF is Swiss Re’s one-stop solution that calibrates all relevant risk assessments and regulatory requirement checks related to data, technology and security to ensure a well-defined risk mitigation plan for trustworthy and sustainable digital services. It ensures adherence to internal policies for the compliant and fair use of data, the compatibility between existing IT architecture and new technologies and the security of digital services developed in-house or offered by third parties.
Moreover, Swiss Re is working with the Monetary Authority of Singapore (MAS) and other financial industry partners to create a framework for financial institutions to promote the responsible adoption of Artificial Intelligence and Data Analytics (AIDA). This framework, known as Veritas, will enable financial institutions to evaluate their AIDA-driven solutions against the principles of fairness, ethics, accountability and transparency (FEAT) that MAS co-created with the financial industry in 2018. Since fairness is a key consideration in underwriting for re/insurers, Swiss Re is working through the Veritas consortium to focus on enhancing the fairness assessment methodology applicable to predictive underwriting for life and health insurance products.
The European Insurance and Occupational Pension Authority (EIOPA) has appointed a Swiss Re representative to its consultative expert group for digital ethics and to chair the workstream on fairness and non-discrimination. The outcomes of this work are expected to be published later in 2021.