While Korea ranks second in Asia for insurance penetration, there are still plenty of unmet needs for life insurance coverage which the industry has to address to remain sustainable into the future.
Speaking at a panel discussion during the Insurance Summit on Industrial Revolution 4.0 held in Seoul this week, CEO of LINA Life Insurance Company Ben Hong said that both societal and technological trends mean that insurers in Korea would have to find ways to adapt their business model.
“There is a convergence of changing consumer needs and digitalisation, for instance self-driving cars should happen soon in Korea and when that happens, premiums will be mileage-based and as a result motor premium volumes will drop.
"Also, people are living longer and so are more focused on living benefits,” he said.
Meanwhile, ABL Life Insurance’s chief digital officer Chang Wonkyun said that access to new data points provides an opportunity for insurers to innovate. .
“If we could measure people’s activities in real time, rather than just use current metrics like age and gender, then we can develop new products depending on the time and risk. Although there may be some regulatory obstacles for such a product to go to market right now, I do see that regulations are moving in a positive direction,” he said.
Given the fact that insurance has a long historic past, it is important for the industry to openly engage with new ideas from outside the sector.
“We have our own culture and processes and sometimes we need someone from the outside to come in and help us, but unless we have an open mind then it will be difficult to set the right environment for it to work,” said Mr Michael Shin, CEO of RGA Korea.
Mr Chang added that the people side is very important in the transformation agenda and hence organisations need to have open communication when embarking on digital transformation.
Meanwhile, Mr Hong pointed out the need to keep the focus on customers and respond effectively to their needs.
“So far much of our investments have been focused on the back office function for operational efficiency but we need to ask how do we create genuine customer value and how do we apply technology to achieve that,” he said.
Panel moderator Ms Kim Mijung, CEO of YONG Consulting, rounded up the discussion by stating her belief that the industry can successfully assimilate new technology and people – rather than having to choose one over the other.