In the Second Half of the Year, AI Will Explain Insurance Instead of Humans... "It Will Become a Key Channel for the MZ Generation"

Improvement of Non-Face-to-Face and Digital Insurance Solicitation Regulations
Exemption from Face-to-Face Obligation... Permission to Use Voice Bots

[Asia Economy Reporter Oh Hyung-gil] Starting as early as the second half of this year, it will be possible to purchase insurance via phone or internet without meeting an insurance agent in person. An 'Artificial Intelligence (AI) voice bot' will be used to explain important insurance-related information instead of a human.

The Financial Services Commission and the Financial Supervisory Service announced on the 16th that they have prepared detailed plans for the 'Non-face-to-face and Digital Insurance Solicitation Regulatory Improvement' task and have publicly notified amendments to the Enforcement Decree of the Insurance Business Act reflecting these plans.

According to the improvement plan, insurance agents will be exempt from the obligation to meet customers face-to-face. Under the current system, insurance agents must meet customers at least once to explain important matters related to the insurance contract.

Considering the COVID-19 situation and the spread of non-face-to-face culture, the system will be changed to allow important matters to be explained over the phone or recorded, provided safety measures are in place. The face-to-face obligation to meet with an insurance agent at least once will be exempted, and solicitation standards enabling insurance subscription through real-time video calls between consumers and insurance agents will be established.

In particular, the use of 'voice bots' will be permitted during telephone solicitation. Currently, it takes about 30 minutes for an agent to read the standard script directly, and issues have been raised regarding product understanding due to inconsistent explanation speed and pronunciation by agents.

Accordingly, the authorities will have the voice bot read the standard script, while agents will be responsible for answering customers' questions, improving the procedure.

Insurance companies are applying AI from insurance subscription to claims and review processes. This change is also expected to become a channel friendly to the MZ generation, who are familiar with using mobile devices.

A report titled "The Impact of Changes in Sales Channels on the Insurance Industry," published by the Korea Insurance Research Institute, stated, "Younger generations prefer communication methods using KakaoTalk, text messages, or digital devices rather than phone calls or face-to-face meetings," and "It can be interpreted that these generations will prefer consultations through chatbots rather than meeting or calling customer centers or agents in the future."

The report also predicted, "The main customers of the insurance industry in the future, those in their 20s and 30s, prefer using advanced devices over face-to-face interactions and prefer to explore information and make decisions on their own," adding, "When the main consumer demographic shifts to these groups or even younger generations, AI channels that guarantee privacy will become the primary sales channels for insurance products."