[1mm Financial Talk] Insurance Industry AI Utilization 'Hataehatta'

Insurance Training Institute Hires New Employees Through AI Idea Challenge
Fire Insurance Association Creates Fire Prevention Content Using AI
Insurance Companies Actively Utilize AI for Simplified Underwriting and Fraud Prevention

There are increasing cases of artificial intelligence (AI) applications in the insurance industry. The scope of use is expanding across various fields, from insurance underwriting to fraud prevention and advertising.

Among the heads of insurance-related organizations, Ha Tae-kyung, the president of the Korea Insurance Development Institute, shows the most interest in AI. Since his appointment as president earlier last month, he has been posting AI-related content almost daily on his Facebook channel, 'Hataehatta Ha Tae-kyung.' 'Hataehatta' is a phrase that means 'burning white and burning hot,' used when something receives enthusiastic attention from many people.

On the previous day (the 15th), President Ha held an executive meeting and decided to hire one new employee through an idea disclosure challenge for a 'Reliable Agent AI Recommendation Service (tentative name).' At the end of last month, the institute also held an internal idea challenge using ChatGPT to design an educational curriculum. Recently, the Korea Insurance Development Institute, the only insurance education specialized institution in Korea, has seen a surge in AI-related events.

Fire prevention content created by the Korea Fire Insurance Association using artificial intelligence (AI). [Source: Screenshot from Korea Fire Insurance Association YouTube]

The Korea Fire Insurance Association has recently been posting a series of fire prevention content in the form of short-form videos using AI. The AI technology creates entertaining everyday scenarios and incorporates humor codes that resonate with younger generations. So far, nine videos, including 'The Last of the Musical Actor,' have been produced, with a combined view count exceeding 270,000 on platforms such as YouTube. Kim Dong-gyu, head of the Management Support Division at the Korea Fire Insurance Association, said, "We mainly focused on fire-vulnerable targets such as traditional markets, houses, and forests," adding, "We were able to present the somewhat heavy topic of fire prevention in an engaging way through AI."

Insurance companies are also enhancing AI technology to improve financial consumer services. Dongyang Life Insurance upgraded its Claims Risk Detection System (CRDS) on the 7th. Introduced in 2011, Dongyang Life’s CRDS can detect early signs of insurance fraud based on various data such as diseases, hospitals, doctors, and insured persons. With this upgrade, AI comprehensively assesses risk factors in insurance claims, expanding the scope of automatic reviews that do not require separate examination procedures. Currently, 99% of all insurance claims can be processed from receipt to payment within a day.

Lotte Insurance also announced on the 7th that it introduced the 'Simple Product One-Click Automatic Review System,' which automates underwriting for simplified insurance products for customers with pre-existing conditions or elderly clients. This service allows immediate confirmation of eligibility for individual coverages within the segmented simplified insurance products. A Lotte Insurance official explained, "Currently, AI completes automatic reviews for about 97% of cases using this system," adding, "In the second half of the year, we plan to fully implement automatic reviews for comprehensive long-term insurance products with more complex coverage and disclosure requirements."

Compared to other industries, the insurance sector still centers on face-to-face interactions, so its potential for AI utilization is expected to be high. Son Jae-hee, a research fellow at the Korea Insurance Research Institute, said, "AI can be applied in various areas of the insurance industry, including work support, marketing, product recommendation, underwriting, and customer response," and added, "To secure AI competitiveness, efforts are needed not only to expand the recruitment of specialized personnel but also to systematize education to enhance AI utilization capabilities among internal employees."