The AI-Insurtech Challenge: Building Generational Trust

Introduction

As today’s life insurance industry continues to evolve along with advancement of AI technology, insurtech is being transformed and reimagined to serve the insurance industry. Improved risk assessment, smarter underwriting and claims processing, and more accurate fraud detection are just some of the AI-enabled enhancements that are being integrated into existing processes as pilot programs. However, beneath the insurtech revolution lies a fundamental challenge: different generations view AI and data sharing in dramatically different ways.

Insurance has always been about trust — having confidence that your insurer will be there when disaster strikes. To build trust with today’s generational cohorts, insurers must devise strategies that cater to their preferences. Ultimately, the future of life insurance will be shaped by how successfully insurers can bridge the divide between human trust and technological capability.

AI Through Generational Eyes

Today’s insurance customers span multiple generations, each bringing distinct expectations and comfort levels with AI-powered insurance solutions. For example, younger generations, namely Gen Z and Millennials, are digital natives who intuitively understand digital exchanges and prioritize convenience over privacy. They value speed, convenience, and digital-first interactions, and respond well to instant quotes, streamlined applications, and mobile-first interfaces. They are generally comfortable with faster underwriting if it means faster approvals and more personalized pricing.

Older generations, specifically Gen X’ers and Baby Boomers, approach new technologies with greater skepticism. They prefer human interaction, openness about data collection methods, and are wary of data sharing and transparency in algorithmic decision-making. They welcome hybrid models that combine technological efficiency and convenience with human oversight, but still want the option of speaking with a human representative for complex questions relating to their financial needs. AI may initially come across as a “black box” to older generations, especially when it is used to calculate rates or evaluate claims.

Trust Through Transparency

To help bridge the trust gap, insurers should explain how AI improves accuracy and reduces bias in underwriting to illustrate that algorithmic decisions aren’t arbitrary, but based on comprehensive data analysis that human agents might miss. Transparency is especially crucial when AI makes decisions that affect premiums or claims. Therefore, insurers should explain the key factors considered, such as age, health lifestyle, family medical history, coverage amount and occupation. Insurers must also be completely straightforward about what data is collected throughout the entire process, how it is used in decision-making, and what safeguards protect sensitive information.

Integration Strategies with a Gradual Approach

Another method for building AI adoption among consumers is the gradual introduction of low-stakes applications before moving to critical functions. For example, using AI for appointment scheduling or document processing to slowly introduce customers to the technology’s valuable benefits and to acclimate them to the user experience without the anxiety of more important coverage decisions.   

Progressive disclosure is particularly effective in life insurance AI solutions as it enables quick, automated assessments of coverage needs or eligibility, while offering seamless access to human agents for more personalized, in-depth discussions. This approach accommodates the diverse preferences of different generations; some may prefer digital self-service, while others value human interaction. It also highlights the practical value of AI in simplifying complex life insurance decisions.

For younger customers, emphasizing AI’s speed and convenience resonates strongly. For older customers, focusing on how AI helps human agents make better, more informed decisions builds confidence in the technology. It also illustrates how the AI/human partnership can maximize efficiency and allow individuals to focus on complex situations that require empathy, judgment, and relationship-building, which is the heart of life insurance.

The Final Word

Building generational acceptance of AI in insurance requires patience, flexibility, and respect with collaboration across the value chain. Insurers must create an insurance experience where AI enhances trust rather than undermining it, and where customers feel confident that technology is working in their best interests, regardless of their age or comfort with technology. By respecting generational differences while demonstrating AI’s genuine benefits, insurers can build a future where consumers of every age are protected from life’s unexpected events.