It should be evident that insurers can and must leverage data and digitisation to strengthen your value proposition to the customer. As one FinTech firm tells me, the battle is won by whoever can provide a more delightful customer experience. At the same time, we should not forget to ‘mind the gap’, or gaps. As insurers delve deeper into the realm of smart tools powered by complex algorithms, artificial intelligence and machine learning, there is also a need to identify and address potential pitfalls of such capabilities. For instance, one particular concern in deep learning models is that the “learning” by the machine is a black box, which could lead to biased “data truths”. This in turn may produce decisions or outcomes that are unexplainable, non- transparent or even unfair. Also, while Big Data enables finer segregation of risk, the concept of insurance is always premised on risk pooling. A careful balance has to be struck between segmentation versus the sharing of risk among policyholders, for insurance to retain its long term societal relevance. We should guard against automatic or blanket financial exclusion or embedded selection bias. There is also a need to safeguard individuals’ right to privacy in the use of personal data. Therefore, an emerging area of focus for MAS will concern the ethical use of data by financial institutions. We will look to provide more guidance on the issues of fairness, ethics, accountability and transparency amidst this technology revolution. Insurers are custodians of very large data sets, including personal information.
1 The Global Insurance Protection Gap, The Geneva Association, 2014 2 2012 Protection Gap Study – Singapore, Life Insurance Association of Singapore, 2012 3 Spotlight on Distribution in Asia, Swiss Re – LIMRA, 2015 4 Insurance and Technology: Evolution and Revolution in a Digital World, Morgan Stanley and BCG, 2014  5/5  BIS central bankers' speeches