As insurers pursue growth strategies targeting younger demographics and invest in artificial intelligence to improve operations, they face a common obstacle – trust.
Recent research from GlobalData revealed that scepticism toward both insurance providers and AI technologies is shaping consumer attitudes and impeding adoption.
A GlobalData poll conducted in early 2025 (Q1 2025) highlighted a significant gap between insurers and younger buyers, with over half of the 174 respondents citing either a lack of trust or confusion about insurance as key barriers for Gen Z and millennials.
These younger consumers, often introduced to insurance through compulsory products like auto policies, remained wary of the industry’s value and transparency.
Ben Carey-Evans, senior insurance analyst at GlobalData, said insurers must strengthen engagement and provide more visible value to reverse the industry’s long-standing struggle with trust.
“A lack of consumer trust is a recurring issue for the industry. Rising premiums across some personal lines are not helping the situation; increasing the value and engagement insurers offer will be essential in turning this around,” he said.
The trust issue was mirrored in consumer reactions to the growing use of AI. GlobalData’s separate 2024 international survey – spanning over 5,500 participants in 11 countries – found that although most respondents recognised efficiency benefits from AI, many had concerns about fairness, bias, and data privacy.
“Despite the positive perceptions, insurers face challenges in ensuring consumers adopt AI tools. Many consumers find that the technology is not yet sufficiently developed to be adopted at scale, eroding their trust,” said Beatriz Benito, GlobalData’s lead insurance analyst.
Satisfaction levels with AI tools like chatbots were high – 74.5% of users reported positive experiences. Yet this satisfaction has not translated into full acceptance.
Transparency about how algorithms make decisions, especially in scenarios like claims processing, remained a critical issue.
“Insurers must prioritise transparency in AI-driven decisions, particularly among those who perceive bias in the tools, such as providing negative claim outcomes. Some consumers will have data privacy concerns, while others will simply just prefer interacting with a human,” Benito said.
Similarly, Carey-Evans emphasised that improving policy clarity and customer education could help rebuild trust with younger audiences. Simplified product terms and more accessible communication – already adopted by some insurtech players – could be key steps in reducing consumer resistance.
Both analysts pointed out that younger consumers, while digitally native, are not automatically more trusting of technology or institutions. They expect transparency, control, and meaningful interactions – whether from a human agent or a digital tool.
“Longer-term issues such as consumer understanding and trust cannot be fixed simply by improving PR and social media strategies. Instead, providers must aim to increase engagement with customers, make policies easier to understand, and add value and incentives where profit margins allow.” Carey-Evans said.
