The Key Theme of the New Year Insurance Industry Reorganization is 'New Business'

Building New Business Ecosystems in Healthcare and Mobility
Establishing Dedicated Teams for Pet Insurance, Single-Person Households, and Long-Term Care Insurance

Kim Cheol-ju, President of the Life Insurance Association (left), and Lee Byung-rae, President of the General Insurance Association.

The insurance industry has launched an offensive to capture new markets through organizational restructuring in the new year. With uncertain economic conditions expected this year and the existing insurance market reaching saturation, the strategy is to secure future revenue sources first to ensure survival.

Samsung Fire & Marine Insurance established a Healthcare Business Team under the Long-term Insurance Division, a Specialized Compensation Team under the Auto Insurance Division, and a Mobility Technology Research Institute in last month's organizational restructuring. The existing Traffic Safety Culture Research Institute and Mobility Museum were integrated into the Mobility Technology Research Institute to improve efficiency and strengthen work capabilities. The strategy is to develop insurance products and services for future new businesses such as healthcare and mobility, thereby building a new ecosystem.

KB Insurance set up a dedicated Pet business department through year-end organizational restructuring. As of the end of 2022, there were 5.52 million households owning pets, but the pet insurance subscription rate was only about 0.9%. This indicates high market growth potential. The dedicated Pet business department is responsible for developing insurance products related to pets and supporting related services such as platforms.

DB Insurance established the Corporate Business Division 4, Overseas Management Part, Americas Compensation Part, and New Business Marketing Division. The Corporate Business Division 4 was set up as part of organizational reorganization to achieve balanced growth in general insurance profits and sales and to enhance capabilities for pioneering new markets. The Overseas Management Part aims to accelerate overseas business, which has shown good performance. Last year, DB Insurance acquired two non-life insurance companies ranked within the top 10 market share in Vietnam, currently operating three non-life insurers there. The New Business Marketing Division was created to strengthen non-face-to-face marketing functions and increase synergy among various channels.

Life insurance companies, which had maintained somewhat conservative strategies, have also begun structural reforms. KB Life Insurance established the CPC Strategy Division targeting demographic changes such as aging and the increase of single-person households in this organizational restructuring. Under the CPC Strategy Division are the Product Headquarters, Sales Strategy Headquarters, and Customer Support Headquarters. The intention is to focus on field-centered resources tailored to the customer-product-channel (CPC) situation. Additionally, a 'Third Insurance Promotion Task Force (TF)' was established to strengthen the competitiveness of health insurance. The third insurance combines features of both non-life and life insurance, including accident insurance, disease insurance, and nursing care insurance. Since non-life insurers hold a 75% market share, it has been difficult for life insurers to enter this market.

Samsung Life Insurance established a 'Task Force (TF) for Reviewing Senior Living Business Promotion' within the Planning Office in the organizational restructuring carried out on the 7th of last month. The TF will serve as the control tower for Samsung Life's nursing care business. The nursing care business is related to Samsung Life's 'Health Asset Project.' Since 2022, Samsung Life has been promoting the 'Health Asset' project, a new business model that links assets and health to provide comprehensive solutions throughout customers' lives.

The heads of the two major insurance associations also emphasized 'new business' as a key theme in their New Year's addresses. Lee Byung-rae, chairman of the General Insurance Association, said, "We will organically link data from various fields with the non-life insurance industry to establish a foundation for promoting new businesses such as mobility and healthcare," adding, "We will mandate insurance subscription for electric vehicle charging facilities and expedite the introduction of insurance covering hacking or system failure damages of virtual assets and index-type insurance to prepare for climate risks." Kim Cheol-joo, chairman of the Life Insurance Association, stated, "We will support the development of future insurance service models such as embedded insurance and DIY insurance using new technologies like artificial intelligence (AI), big data, and the Internet of Things (IoT)," and "We will enhance the utilization of big data such as public medical data to develop customized insurance products and services."