The introduction of app-based health management insurance products has become possible after the financial authorities finally approved the practice.
The Financial Services Commission and the Financial Supervisory Service released a guideline last month that clarified a previous ban that kept life insurers in Korea from offering such products, reported JoongAng Daily.
Under the new guideline, life insurers are now able to develop products that offer benefits on health management related activities. Previously the insurance business law was interpreted as banning any activities that were considered medical services.
“The guideline paved the way for insurers to offer a product aimed at incentivising people to follow through with a healthier lifestyle. Previously, the government banned such products because they can be considered medical treatment. But as the regulator discussed this issue, they’ve reached an agreement that rewarding better health conditions is different from suggesting treatment or diagnosis,” said Cho Yong-woon, a research fellow at Korea Insurance Research Institute. “I believe that such programmes have good business prospects because clients will find them attractive.”
Tapping the new opportunity, the Korean arm of AIA Life Insurance is preparing to launch the health management “Vitality” programme, in April next year. The insurance products offer various benefits including discounts on insurance subscriptions, higher claims and even Starbucks coupons when subscribers follow through with their health goals.
SK C&C is jumping into the tech incorporated behavior economics insurance business, announcing on 29 November that it had signed a partnership with AIA’s Korean branch to develop a health management platform that runs on Avril, SK’s artificial intelligence platform. SK C&C hopes that its platform will provide a more sophisticated health management programme that is customised to meet users’ physical conditions and preferences.
“Applying the various digital transformation technologies from AI to cloud storage and big data analysis, we will actively cooperate so that AIA Vitality will lead its customer to a healthier life,” explained SK C&C CEO Chang Dong-hyun.
The guideline, however, still prohibits insurance companies from handing out wearable smart devices or other medical products like blood pressure readers.
Other Korean financial businesses have already been attracting clients with behaviour-based programmes, from offering higher interest rates for those that go on diet or quit smoking to offering discounts on credit card spending when signing up for membership of fitness centres or golf clubs.