Insurers desperate for survival with digital drive

Seen above is an introduction of an insurance product for pets by Carrot Insurance. The company is the nation's first digital-only insurer which started its service on Jan. 14. Courtesy of Carrot Insurance

Firms urged to expand non-face-to-face services

By Lee Min-hyung

Major life insurers are going all-out to embrace digital transformation in 2020 as a means of survival amid an uncertain outlook for their rebound from a painful earnings shock last year.

Despite their pledges, the prospect for the local insurance market remains murky in the face of a continuous economic slowdown. A prolonged low interest rate also comes as another external risk factor for their earnings this year

But with a sense of urgency sweeping across the insurance industry, market players are on track to develop new digital and mobile initiatives to find new growth engines there.

Kyobo Life Insurance, the nation's third-largest life insurer in terms of assets, has especially underlined the need for all its staff to join its corporate-wide digital drive.

“Digital transformation is not a choice, but a must,” CEO Shin Chang-jae said in a recent speech to executives and senior officials.

“Our management strategy in 2020 is to become digital Kyobo, beyond survival in the industry,” he said.

Shin also urged all employees to continue setting up digital strategies, and take them into action, as digital innovation is not something that will be driven by a certain division,” he said.

Hanwha Life Insurance, another top-tier life insurer here, is also seeking to join the digital bandwagon in order to not fall behind the toughening market competition.

“We have developed an artificial intelligence (AI) driven software that automatically determines whether to approve insurance claims from customers for the first time in the industry,” an official from the company said.

The system will allow the company to save more than 10 billion won ($8.61 million) over the next five years, as it will carry out the workload previously done by people, according to the company.

The Hanwha affiliate developed the system by using big datasets of more than 11 million insurance claims from the past three years.

For years, insurance market players were not agile enough to catch up with the digital paradigm shift, compared with other industries.

But as the market gets more and more saturated amid fierce rivalry, they have joined the belated drive to find next cash cows there.

Aside from toughening competition from existing players, emerging insurers also continue to come to the market by differentiating themselves with their own digital and mobile platforms.

Carrot Insurance, the nation's first digital-only non-life insurer, stared its service as of Jan. 14. Customers can apply for the firm's insurance products easily via mobile devices and computers.

“Life and non-life insurers will continue to introduce more mobile and online products to attract the younger generation who prefer non-face-to-face transactions,” an official from the industry said.