New Contract Profitability Calculation Period Reduced from 45 Days to 1 Day
Improved Efficiency in Product Strategy and Faster Decision-Making
Fortress Innovation, a fintech specialist company, announced on the 17th that it has successfully established the 'New Contract CSM Daily Monitoring System' at Kyobo Life Insurance, which rapidly calculates expected profits and costs of new insurance contracts, Contractual Service Margin (CSM), and new contract value.
The new contract CSM system has shortened the profitability calculation period for new contracts from up to 45 days to within one day. Previously, the period extended up to 45 days for accounting settlement purposes. The reduction was made to accelerate management decision-making and support internal management.
Profitability data can be checked through the management information system the day after a new contract is signed. Insurance companies can formulate product strategies based on the latest profitability data. The company expects this to simultaneously solve two challenges: speed and accuracy in profitability management.
Fortress Innovation and Kyobo Life Insurance optimized the system through a joint project lasting about one year and one month. After completing a pilot operation earlier this year, full-scale operation began last month.
With the introduction of this system, Kyobo Life Insurance has established a continuous profitability monitoring system and an early warning system. This enables rapid identification of new contract profitability. It also laid the foundation to strengthen competitiveness in processes such as product development, marketing strategy formulation, and risk response.
An environment capable of systematically accumulating high-quality data related to product profitability was also established. Based on this, the possibility of integrating new technologies such as big data and artificial intelligence (AI) in future insurance product pricing processes has increased.
The project applied Fortress Innovation’s financial solution 'InnoLink.' InnoLink is a high-performance solution capable of quickly analyzing and simulating large-scale financial data. It provides excellent computational performance based on parallel processing technology using Central Processing Units (CPU) and Graphics Processing Units (GPU).
Since its establishment in 2013, Fortress Innovation has provided product development, new international accounting standards (IFRS17), Asset Liability Management (ALM) solutions, and actuarial consulting to financial and insurance companies. In 2022, it was incorporated as a subsidiary of Kyobo Life Planet, further enhancing its expertise and competitiveness in the insurance and financial solutions sector.
In particular, through its self-developed MS-Excel-based add-in software 'Excel Booster,' it has dramatically improved the calculation speed of existing Excel programs. This solution is supplied to five major domestic life insurance companies, six non-life insurance companies, and one actuarial corporation.
Previously, Fortress Innovation built an accounting settlement system in 2018 in preparation for Kyobo Life Planet’s IFRS17 adoption. This time, by establishing the IFRS17 accounting system for Kyobo Life Insurance as well, it contributed to the advancement of the financial infrastructure of both companies.
A representative of Fortress Innovation said, "Through collaboration with Kyobo Life Insurance, we confirmed new possibilities in the insurtech field. Building on this successful case, we will continue to provide differentiated financial solutions not only to domestic financial companies but also to overseas markets in the future."
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