Kim Yong-deok, Chairman of the General Insurance Association, "We will reduce loss ratios, insurance fraud, and operating expenses"

Proposal of 'Good Insurance' at New Year Press Conference
"Will Increase New Markets, New Technologies, and Consumer Trust"

Kim Yong-deok, Chairman of the Korea Non-Life Insurance Association, said at a New Year's press conference held at a restaurant in Jongno, Seoul on the 20th, "Instead of reducing loss ratios, insurance fraud, and operating expenses, we must increase new market development, utilization of new technologies, and consumer trust." From the left: Choi Yoon-seok, Head of Non-Life Insurance Division 2 at the Korea Non-Life Insurance Association; Lee Jae-gu, Head of Non-Life Insurance Division 1; Executive Director Seo Kyung-hwan; Chairman Kim; Seo Young-jong, Head of Planning and Management Division; Go Bong-jung, Head of Consumer Service Division.

[Asia Economy Reporter Oh Hyung-gil] Kim Yong-duk, Chairman of the Korea Non-Life Insurance Association, emphasized on the 20th, "This year, the non-life insurance industry must reduce loss ratios, insurance fraud, and operating expenses, while expanding new markets, utilizing new technologies, and increasing consumer trust."

At a New Year's press conference held at a restaurant in Jongno, Seoul, Chairman Kim stated, "Last year was a difficult year due to the rising loss ratios in indemnity health insurance and automobile insurance, as well as deteriorating profitability caused by low interest rates."

He then presented the key tasks for this year as ▲innovation in insurance services through artificial intelligence (AI) and other technologies ▲creation of new insurance markets aligned with social changes ▲institutional improvements for establishing a sound insurance culture ▲creation of a healthy business environment and restoration of consumer trust.

He said, "The non-life insurance industry has entered a phase of high-intensity austerity management such as cost reduction and is consulting with financial authorities on multifaceted measures to address worsening loss ratios. We will avoid short-term performance-oriented external competition and realize 'Good Insurance' by creating new markets and practicing value management to complement the public safety net through the role of a private safety net."

First, the association plans to promote business innovation across the entire process from insurance planning and sales to underwriting and claims payment by utilizing AI. In addition, with the passage of the 'Data 3 Act' in the National Assembly, it will support the launch of customized insurance products based on big data.

There are plans to introduce specialized insurance for early-stage patients using data such as physical characteristics and activity patterns, as well as region-specific disaster insurance utilizing big data on natural disasters.

On the 20th, Kim Yong-deok, Chairman of the General Insurance Association, stated at a New Year's press conference held at a restaurant in Jongno, Seoul, "Instead of reducing loss ratios, insurance fraud, and operating expenses, we must increase new market development, utilization of new technologies, and consumer trust."

In response to changes in lifestyle patterns, the POS (point of sale) sales method will be expanded for activities such as hiking, fishing, and golf, and On-Off insurance will be activated. Liability insurance subscriptions will also be promoted for personal mobility and the drone industry, and coverage will be expanded for users of shared services.

Regarding indemnity insurance, a premium discount/surcharge system based on medical utilization will be introduced, and incentives for contract conversion to the relatively affordable new indemnity insurance will be explored.

In automobile insurance, the accident burden fee for drunk driving offenders will be increased, and detailed underwriting guidelines for Korean traditional medicine treatment fees will be proposed to the authorities.

Also, with the implementation of the corporate agency (GA) commission system reform in 2021, market monitoring will be strengthened and information disclosure to planners will be expanded. An AI-based recognition system will be introduced to actively respond to insurance fraud and also to deal proactively with 'black consumers.'

Chairman Kim said, "We will suppress unnecessary operating expenses and strengthen the self-adjustment function of non-life insurers," adding, "We expect to restore consumer trust by minimizing consumer inconvenience and unnecessary complaints."