Insurance Research Institute: "Insurance Companies Must Provide Digital Consumer Experiences That Meet Customer Expectations"

[Asia Economy Reporter Oh Hyung-gil] For insurance companies, the digital environment must become a new growth opportunity by changing the perspective on the insurance industry and the way insurance is provided to deliver the digital consumption experience that customers expect.

Son Jae-hee, a research fellow at the Korea Insurance Research Institute, stated in the report "Next Insurance: Digital Environment and the Insurance Industry" on the 4th, "With the expansion of big data and artificial intelligence (AI) utilization, the growth of the MZ generation, and the entry of big tech companies into the insurance industry, the creation of new digital-based products and services has emerged as an urgent task for the insurance industry."

Research fellow Son particularly diagnosed that COVID-19 expanded digital experiences not only for the MZ generation but also for middle-aged and older adults, serving as an opportunity to spread the recognition that digital transformation is necessary for insurance companies.

He also interpreted that with the emergence of big tech companies, digital transformation in the new environment is an indispensable factor to secure survival competitiveness and expand market dominance.

Son forecasted, "Changes in the digital environment will expand the scope of the existing insurance industry and change the insurance industry's value chain and the customer values it aims for. In the future, the insurance industry will evolve into a data-based risk management service that predicts and suppresses risks in advance and immediately measures risks in customers' daily experiences, providing coverage corresponding to the measured risks."

He added, "The value-added stages of insurance services, from risk underwriting to insurance claim payments, will be automated and refined based on technology and data. Insurance companies must provide values such as flexibility, personalization, real-time provision, and seamless connectivity to offer customers a satisfying digital insurance consumption experience."

Regarding the entry of big tech and fintech companies into insurance, he advised, "There is also a possibility that they will specialize in parts of the insurance industry value chain or provide simple and inexpensive products, advancing into a competitive and cooperative relationship with insurance companies. There is no need to respond overly defensively."