[AI Revolution](72) AI Customizes Insurance Plans... Significantly Reduces Costs

'Signal Planner' Operator Habit Factory
Solving Information Asymmetry in the Insurance Industry with AI
Generative AI-Integrated Service Launch Within the Year

Jung Yoon-ho, CEO of Habit Factory

Kim Ji-won (pseudonym), a young professional in her 20s who has just secured a job, searched for information to find insurance products suitable for her age and financial situation. Most recommendations on YouTube and various blogs were promotional, and there were too many product options. She was also confused about which payment method to choose, such as 'renewable' or 'non-renewable,' depending on the type of insurance like indemnity insurance and cancer insurance.

Fintech (technology + finance) startup Habit Factory has been operating the insurance recommendation service 'Signal Planner' since September 2020 to address these inconveniences. When customers enter their financial information into the Signal Planner application, it recommends the optimal insurance products. It also allows evaluation of existing insurance policies. Jung Yoon-ho, co-CEO of Habit Factory, explained, "I wanted to change the problem in the traditional insurance industry where agents had to manually analyze volumes equivalent to 10 insurance policies and 1,000 pages of insurance terms," adding, "We developed an artificial intelligence (AI) program as a solution to resolve information asymmetry and inefficiencies caused by reliance on agents."

In the traditional insurance market, one insurance agent handled everything from product proposals to insurance analysis, subscription, and maintenance. Habit Factory divided the tasks so that AI handles insurance analysis and recommendations, while full-time agents take care of product underwriting, consultation, and contract signing. AI solves customer-specific insurance product comparison and proposals in just 10 seconds through a customized product recommendation engine. Insurance products include comprehensive insurance, child insurance, indemnity insurance, indemnity insurance for those with pre-existing conditions, and driver insurance. CEO Jung said, "The driving force behind Habit Factory's rapid growth among fintech companies is the automation of insurance design and management based on big data," adding, "Using AI technology, the efficiency of agents' work has increased by 25 times compared to the industry average."

Although AI has taken over 86% of the tasks previously done by agents, the core of Habit Factory's operations remains 'people.' The company's philosophy is not for AI to completely replace agents but to enhance their efficiency and leave the final judgment to the agents. Habit Factory employs all Signal Planner agents as full-time employees, breaking away from the common practice of insurance agencies (GA) hiring agents as commissioned workers. Recently, they even hired a hearing-impaired agent as a full-time employee. Since insurance can be sufficiently sold through text and images via social networking services (SNS) like KakaoTalk, they believe that as long as the agent is capable, there is no problem.

Habit Factory service image.

Habit Factory is developing technology to integrate generative AI into the Signal Planner service, aiming for a November launch. They plan to first introduce the 'Signal AI Consultant,' a service that provides automated AI-based questions and answers for customers with many insurance inquiries. CEO Jung said, "We have enhanced the vast amount of accumulated insurance information and consultation data by integrating it with generative AI technology," adding, "It received positive feedback during recent tests with agents and industry stakeholders." Habit Factory also plans to launch an 'Agent Support AI Service' to assist agents with their work using generative AI technology.

Despite the challenging investment environment, Habit Factory secured an investment of 6.5 billion KRW through Shinhan Financial Group's digital strategic investment (SI) fund, 'Shinhan Hyper Connect Investment Association No.1,' on the 10th of this month. In November 2021, they also raised 10 billion KRW in Series B funding from KB Life Insurance and others. The total accumulated investment to date is approximately 20 billion KRW.

As part of its global business, Habit Factory established its U.S. subsidiary, Habit Factory USA, in January last year. In March of the same year, they launched the mortgage loan service 'Loaning.ai.' Their strategy is to leverage their experience in digitizing the entire sales process using technology and data from the Korean insurance market to target the U.S. loan market. So far, the loan amount facilitated has exceeded 60 billion KRW. Within one year of establishing the subsidiary, they provided interest rates up to 1.5% lower than the largest U.S. lenders, Wells Fargo and Rocket Mortgage, saving customers a total of 8.9 billion KRW in interest costs. CEO Jung stated, "The U.S. market is more advanced in generative AI technology than Korea, with AI services like ChatGPT and Bard starting earlier," adding, "Next year, we plan to introduce a service in the U.S. market that combines mortgage-based fintech and real estate-based proptech."

Jung Yunho, CEO of Habit Factory.