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By Jhoo Dong-chan
An increasing number of the nation's insurance companies are adopting information technology (IT) such as big data, artificial intelligence (AI) and the internet of things (IoT) to develop new business models.
Insurance has been one of the most conservative industries in terms of technological innovation, depending heavily on insurance planners in sales and customer services.
The trend is, however, radically changing as more insurers are seeking to build the so-called insuretech platform by introducing new IT business models.
According to the General Insurance Association of Korea (GIAK), 14.6 percent of the nation's actual insurance policyholders did not submit an insurance claim after undergoing medical treatment in 2018.
Considering non-life insurers paid a total of 7.5 trillion won worth of actual insurance benefits last year, more than 1 trillion won worth of actual insurance benefits weren't given to policyholders based on the GIAK study.
In a bid to help policyholders claim their insurance benefits more easily, insurers are introducing various IT-based platforms where a policyholder only needs to submit a doctor's note and bill via a smartphone app.
"Taking a photo is the only necessary step for insurance claims under the platform," a GIAK official said. "More insurers are also doing their best to introduce a system under partnership with IT firms to give policyholders insurance benefit right after the medical treatment."
Insurers are also establishing internet-only subsidiaries since a growing number of customers want to buy their insurance products online.
In 2013, Kyobo Life set up an internet-only insurance subsidiary Kyobo LifePlanet with a starting capital of 32 billion won ($28.4 million), the nation's first internet-only insurance company.
Hanwha General, the non-life insurance arm of Hanwha Group, also said it will establish the nation's first internet-only non-life insurance firm by the end of 2019.
SK Telecom and venture capital Altos also participated in setting up the internet-only non-life insurer by each investing in a 9.9 percent stake. Korea's largest carmaker Hyundai Motor also owns a 5.1 percent stake.
Utilizing SK Telecom's navigation app T Map and its big data, the firm will analyze customers' driving range and habits to determine each car insurance policyholder's premium. The premium will be up to 30 percent cheaper than those offered by existing car insurance products, according to a Hanwha General official.
The firm will also give a discount to safe drivers based on the analysis.
"An increasing number of customers buy insurance online instead of via insurance planners. Firms, therefore, are introducing various online products to cope with such demand," said a Samsung Fire & Marine worker.
"Adopting various future technologies is revolutionizing insurers' business models as part of their efforts to improve profitability. The insurance business is facing difficulties at the moment. Such efforts are a must."
