Lotte Sonbo, Automates Driver Insurance Underwriting with AI

Driver Insurance Underwriting Rejection Rate 0% Since August Last Year

Lotte Insurance announced on the 8th that it has automated the underwriting process for driver insurance using its own artificial intelligence (AI) system.

The 'Long-term Artificial Intelligence Underwriting System' (AUS), which has been operational since last year, can instantly verify eligibility based on the subscriber's characteristics and medical history. It has developed and installed 'alternative product guidance' and 'product recommendation functions,' which are difficult for underwriters to explain, and plans to pilot these in simplified insurance underwriting soon.

Since August last year, the rejection rate for driver insurance underwriting conducted through AUS has been 0%. Lotte Insurance plans to fully automate simplified insurance underwriting through AUS by the first half of this year and enhance market competitiveness by optimizing underwriting policies.

Lotte Insurance has also completed the development of a big data-based 'Intelligent Early Warning System' (IWS). IWS is a system that detects and notifies in real-time abnormal signs such as sudden increases in loss ratios and insurance fraud, as well as expected loss ratios, based on information collected during insurance claims, including disease codes, accident frequency, and coverage. Lotte Insurance plans to apply various types of algorithms to IWS in the second half of the year to improve precision and recall and actively utilize it for loss ratio management.

Since 2022, Lotte Insurance has been developing its own AI systems such as AUS and has been using them in some areas since last year. While designing differentiated models considering the characteristics of each product, it has significantly improved performance and usability by applying reinforcement learning techniques and explainable AI (XAI) methods.

To this end, it has recruited external experts in big data and AI and created an optimal environment to generate synergy with operational departments by directly placing a dedicated team within the long-term insurance business division.

A representative from Lotte Insurance said, “Through the AI-based insurance underwriting system, underwriters can now focus more on complex contracts and establishing underwriting policies,” adding, “We will devote efforts to completing digital transformation (DT) based on such technological competitiveness.”