SEOUL, May 22 (Korea Bizwire) — Insurtech, a combination of insurance and technology, is known as an underdeveloped sector despite its potential.
The Financial Supervisory Service (FSS), in its analysis on how Internet of Things (IoT), big data, artificial intelligence (AI), blockchain, and other new technologies are being used in the South Korean insurance market, showed that IoT is the most commonly used form of insurtech in everyday life.
IoT technology is used in telematics and wearable devices to collect real-time user information for a variety of insurance discounts.
Major property and casualty insurance companies run usage-based insurance plans that combine telematics with car insurance.
Telematics, a combination of telecommunications and informatics, collects driving records including emergency stops or sudden acceleration through the On-board Diagnostics (OBD) system and global positioning system (GPS) data.
Hyundai Marine & Fire Insurance Co. offers a 7 percent discount for cars with ODB installed. If the ODB shows that the driver has met safety requirements, Hyundai offers an additional discount of 5 percent.
Life insurance firms collect health data from clients, including exercise, diet, and regular checks, through wearable devices to offer insurance discounts or cash back.
AIA Korea offers mobile fee discounts, coffee coupons, and online gift cards if the client achieves exercise goals set in a smartphone app.
Insurance firms are also using big data technology for marketing and contract evaluation.
Companies recommend to potential clients a variety of insurance plans that are most popular among those similar to the client’s age, occupation, and income, and calculate the risk of accidents among new contracts and automatically accept ones that are low-risk.
“We will use big data to specify various risks and raise predictive accuracy to come up with insurance plans that can be tailored to the needs of the clients,” said the FSS.
“IoT technology will be used to prevent accidents and minimize damage through quick response.”
Kevin Lee (email@example.com)