The financial and insurance sector today is synonymous with innovation. With over 100,000 fintechs operating globally, and investment in the fintech sector having exceeded $116 billion in 2025, the industry's success has become closely interlinked with emerging technologies.
Nowhere is this more evident than in insurance. AI-empowered underwriting, geospatial analytics, real-time risk models, and behavioural analytics are all now widespread, underpinning insurer operations. However, while Insurtech solutions are abundant, their adoption shouldn't solely be driven by what works, but what works responsibly.
Every day, insurance providers make decisions that have major implications for their customers, often when those customers are at their most vulnerable. It is, therefore, vital that every decision is justifiable and able to stand up to scrutiny from those customers themselves, as well as regulators and the wider market.
These expectations have been formalised under the Financial Conduct Authority's Consumer Duty, requiring UK firms to act in good faith towards customers, avoid causing foreseeable harm, and support customers in pursuing their financial objectives. However, despite this legislation, current consumer sentiment suggests that many organisations are falling short.
Research shows that just 13% of UK consumers trust their current insurer, and only 8% have been loyal to a provider for more than three years. Further, Forrester has found that, among those with the ability to switch, low-trust customers are 10 times more likely to leave their insurer than high-trust customers.
Legacy technologies can be intrusive
Much of this poor sentiment stems from the fact that traditional checks and balances in insurance have seeded inherent mistrust in customers.
Take for example, the insurance claims process. For most customers, this process is the single most important interaction they will ever have with their insurer. It is the moment when policy language becomes a real-world experience, often during periods of stress, uncertainty, or financial disruption. Customers expect insurers to respond quickly, fairly, and consistently – without unnecessary friction or suspicion.
When handled well, claims can strengthen trust and long-term loyalty by demonstrating empathy, transparency, and operational competence. When handled poorly, delays, inconsistent decisions, or overly burdensome investigations can quickly erode confidence and increase customer churn.
The latter is unfortunately an all-too-common reality, with data-driven underwriting having become increasingly reliant on personal data and individual insights from areas such as credit scoring, and telematics.
While these insights help insurers assess risk and personalise pricing, they have also raised concerns that carriers often collect more information than customers fully understand or feel comfortable providing. As a result, even well-intentioned, data-driven innovations risk being viewed as intrusive rather than beneficial, reinforcing the erosion of trust among policyholders.
For insurers looking to close this trust gap, it's important to seek out technologies that are transparent by design, ensuring customers both see the value of their engagement, and understand how technologies are used to improve decision-making processes, all without impeding the user experience.
Responsible technologies can improve how customers are treated
For years, much of insurance fraud prevention has operated from a position of suspicion – slowing down large volumes of genuine customer claims in an effort to catch a smaller number of fraudulent ones. The result has often been increased friction for everyone, with longer claims cycles and customer experiences that can feel invasive or adversarial, particularly during moments of stress.
Forward-thinking insurers are now beginning to invert that model.
Rather than treating every claimant as a potential fraudster until proven otherwise, many carriers are adopting technologies designed to quickly identify low-risk customers and allow straightforward claims to move faster at First Notice of Loss, while reserving deeper investigations for the smaller number of cases that genuinely warrant additional scrutiny.
This shift is driving the adoption of technologies such as AI-assisted claims routing, document verification tools, and privacy-conscious risk assessment solutions that help insurers make earlier, more consistent decisions across the board without unnecessarily burdening customers.
Take voice-based risk assessment as an example. The human vocal characteristics associated with risk are universal, regardless of language, geography or other demographics. The technology requires just a few simple yes-or-no questions, with the analysis providing an indication of potential misrepresentation in a claim.
These solutions are transforming insurance assessments. Their presence alone can deter fraudulent behaviours, while also accelerating the resolution of low-risk claims.
Technology must uphold trust, not undermine it
In finance and insurance, where trust is built on fairness, every technology must reinforce transparency and accountability rather than undermine them. It is vital that such technologies are used responsibly, with robust controls and governance frameworks in place.
Digital solutions must support data minimisation, avoid the collection of excessive personal data, provide customers with an understanding of how and why decisions are made, and the role that technologies play in that process. For that reason, consistency and auditability are key.
Technologies also should not be used for the purpose of auto-denials on claims or policy applications or renewals. Rather than replacing humans, they should be used as supplementary tools that can help prioritise high-risk cases, with strong bias safeguards such as demographic neutrality.
Insurtechs are undoubtedly exciting, developing promising innovations that will underpin the future of the industry. However, not all that glitters is gold. Regardless of how enticing they might seem, technologies should never be adopted without meticulous evaluation and consideration in finance and insurance. They must be selected, applied, and governed carefully.
By ensuring that technologies are implemented and used responsibly, insurers can innovate while prioritising integrity, ensuring that digital tools enhance operational efficiency while also actively building the trust that is fundamental to long-term customer retention.