Our Wired World

Decoding Digital Trust

The new currency for secure online interaction

SwissRe has released a new study on how organizations can secure and maintain critical trust in the cyber-world, with the insurance industry leading the way. Access the study here.

Global reinsurer Swiss Re today released a report focused on Digital Trust – the critical currency earned by companies who demonstrate their ability to provide safe, reliable and ethical online programs or devices to their users. The report discusses how organizations should go about establishing digital trust. It also addresses how the re/insurance industry is poised to shape how digital trust is secured and maintained.

Digital technologies provide a wealth of solutions, but present a host of risks. For example, misinformation about how to stay healthy shaves valuable years off of human lives and also costs the global economy almost $1 trillion (1.1% of global GDP) per year. For organizations, reputational damage from digital trust issues can be enormous and difficult to regain once lost.

Given the tremendous impact of digital technologies, establishing trust in one’s use of these technologies is paramount. According to PWC’s 2022 Global Digital Trust Insights Survey, organizations that employ the most advanced business practices are twice as likely to have made significant progress in cybersecurity over the past two years.

Among the topics covered in this new report:

  • How insurers, who already serve to build trust across societal sectors, can be conduits of digital trust. Notably, the report notes that the global cyber insurance market is expected to grow to over $25 billion by 2026.
  • How technologies such as blockchain can improve trust and transparency and bolster the “trust quotient” in insurance.
  • An overview of the “Digital Trust Pyramid” – a nine-step methodology to promote a better understanding of the concept and as a lens through which to approach digital trust.

Digital trust is earned by companies who have demonstrated their ability to provide safe, reliable and ethical online programs or devices to their users. The benefits of having digital trust may not be easily visible, yet the cost of losing it can be huge.

“As a reinsurer, trust is a fundamental part of our business,” said Christoph Nabholz, Chief Research Officer at Swiss Re Institute. “In simple terms, when you buy an insurance policy, you receive a promise that we will provide you with financial recompense should disaster strike – and you will trust us to keep our promise. In a world where tech innovations are changing the way we live our lives, including how we manage our health and possessions and much more, digital trust has become of utmost importance.”

Moses Ojeisekhoba, CEO of Reinsurance at Swiss Re: “Providing our clients with reassurance that data will be handled responsibly is a prerequisite for realizing the full potential of digital technologies. In the reinsurance business, digital trust lays the foundation for all of the digital products and solutions that we create and develop. Building, earning and keeping digital trust cannot be underestimated.”

In a world where tech innovations are changing the way we live our lives, including how we manage our health and possessions and much more, digital trust has become of utmost importance...

A typical example of the abuse of digital trust is spreading misinformation on the internet. For example, chronic diseases such as cardiovascular disease and type 2 diabetes are largely caused by poor nutrition and lack of exercise, yet an alarming amount of online information about how to eat healthily and stay fit is misleading or even false. This misinformation not only results in the loss of valuable years of life, but also costs close to USD 1 trillion (USD 962.81 billion) per year globally, representing 1.1% of the world’s GDP, estimates Swiss Re Institute in its latest expertise paper, “Decoding Digital Trust”.

In this new study, Swiss Re Institute 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.

Key Highlights:

  • Cyber resilience is an important step towards establishing digital trust. Swiss Re Institute analysis finds that there is a strong positive correlation between cyber preparedness and digital trust, suggesting that countries that invest in cybersecurity policies, legislation and outcomes experience greater levels of digital trust within their economies. Insurers can help organisations and institutions to adopt better “cyber hygiene” by sharing best practices and encouraging the use of third-party security firms. This in turn will make cyber risk more insurable.
  • A key imperative to establishing digital trust is the protection of personal data. Capturing new and personalised data sets, such as real-time monitoring of fitness and exercise data, has clear benefits for helping individuals maintain a healthy lifestyle. It marks a shift in approach from disease treatment to prevention. In the balance between expanding their digital footprint and using data transparently, it is crucial for insurers to add layers of privacy to ensure fair usage of sensitive and personal data.
  • Insurers can help to foster digital trust. Traditionally underserved smaller businesses can now better protect their digital assets by partnering with firms that combine comprehensive insurance and proactive cybersecurity tools to help manage and mitigate cyber risk. Insurers can leverage new data sources to design and offer parametric products that pay out in case of disruptions such as internet outages. Individual consumers can also benefit from solutions for personal digital risks such as online financial fraud, identity theft, social media liability, cyber bullying, and smart home malware attacks.
  • Recognized standards help boost digital trust. Legal frameworks, global norms and digital trust labels will serve as building blocks for artificial intelligence to be trusted. For example, Swiss Re is one of the pilot companies participating in the Swiss Digital Trust Label Initiative, the product of a partnership between the Swiss government, academia and business. The label can be applied to a specific digital product or service deployed by an individual company. Swiss Re has completed the pilot certification for Magnum Go automated underwriting solutions, which many primary insurance clients integrate into their sales platforms to efficiently and accurately underwrite their consumers’ life insurance policies.