Insurers weigh AI personalisation against data risk

Firms face pressure to balance customisation with privacy safeguards.

More than 70% of insurers are now using AI-powered risk assessment tools, but as personalisation grows, so do concerns about data privacy and regulatory oversight. At Etiqa Insurance & Takaful, Chief Strategy Officer Chris Eng says the solution lies in strategic deployment and clear governance.

“The main way we utilise AI has been in evaluating whether or not there is a potential for fraud,” said Eng. “Now in that case, I think the risk with regards to privacy breaches and AI is quite minimal.”

Beyond fraud detection, AI is also used to personalise customer interactions—without relying heavily on sensitive personal data.

“Another way is with regards to assessing and personalising customer interaction, and again, that is based on customer behavior, rather than customer personal information, where we use the AI to crunch through that data,” he said. “So again, we see that the risk of any privacy breach or any encroachment on privacy issues from that angle is quite minimal.”

For Etiqa, the goal is to use AI “in the best manner to get the right result without throwing in too much of a customer's personal information that would be at risk.”

To preserve the human touch, Etiqa is integrating AI into human-led advisory models, not replacing them. These include agents and bank intermediaries, equipped with AI tools to provide real-time, informed recommendations.

“When we say we enable our agents as well as our bank intermediaries with AI-enabled tools, that is looking at the customer's information, looking at the customer's past transactions, and then using AI… to provide recommendations that will ultimately still be conveyed by the agent,” he explained. “So that human touch will still be there… but in a way, enhanced using AI.”

As AI adoption spreads, so does regulatory scrutiny. In markets where Etiqa operates, regulators are increasingly asking about AI governance frameworks.

“That effort to understand and to monitor and to document the AI being used to prevent potential risks and prevent potential breaches… has already been put in place,” said Eng. “We see a very comprehensive kind of engagement between insurers and regulators going forward.”