Chairman Shin Chang-jae of Kyobo Life Insurance Co.(Photo: Kyobo Life)

Kyobo Life Insurance Co. will send 50 of its executives to Shanghai and Shenzhen, China, in the middle of this month to visit a number of firms with digitalized facilities mixing such technologies as blockchain and AI, including Alibaba and Tencent. They will be joined by 12 officials of its affiliates on the tour, which is being taken at the behest of Chairman Shin Chang-jae who specifically wanted them to learn from China.
The tour is considered rather unusual, with all of the company’s executives visiting a foreign country at the same time. Chairman Shin wanted them to learn how the life insurance firms in China operate and also how they use fintech in various phases of business firms’ operations. He fears the Chinese life insurance firms are about to overtake their Korean counterparts in operation.
Kyobo Life has been ahead of its rivals in the life insurance industry with the introduction of new technology to improve its operations. The life insurer adopted the blockchain technology in its automatic billing system which is being tested at three branches of the life insurer now.
Kyobo Life was selected by the government as the major operator of its Blockchain project. Kyobo is expected to facilitate tests and pilot experiments with the government’s Blockchain platform.
According to local publications, Kyobo Life was contracted by the country’s National Information Society Agency under the Ministry of Science, ICT and Future Planning. The insurance company emphasized that its developers and researchers will particularly focus on the development and testing of Blockchain-based Internet of Things systems.
Along with Kyobo Life, other emerging South Korean Blockchain and fintech startups including D. Lemon, The Loop and One were contracted by the Ministry of Science to collaborate with the research and development team of Kyobo. Although the investment was not disclosed, Business Korea confirmed with Kyobo that all of the companies involved will be funded by the Ministry of Science until the project is completed.
Applying blockchain technology to the insurance business will significantly improve customer convenience, said Chung Kyu-shik, senior manager of Kyobo Life Insurance's fintech taskforce.
The insurer recently became one of four operators of a blockchain pilot project supported by the government. Blockchain refers to a decentralized electronic ledger technology which gained fame as it underpins the digital currency of Bitcoin. Organized last July, Chung's team was the only one with a financial background. They applied the state-of-the-art technology to the process of insurance claims. Kyobo says it will be the first in the world to use the futuristic technology in the insurance industry.
Instead of the conventional idea of having a trusted entity to keep track of any transactions, blockchain allows all participants or entities to record all transactions continuously and sequentially.
By doing so, involved entities will have common authority on the records and save costs required for keeping Policyholders have to go through such hassles because medical data is off-limits to insurance companies due to concerns of data leaks. Chung believes blockchain can make things much easier without compromising data security.
By building a blockchain network between the insurer and the hospital, the policyholder can receive benefits by just telling hospital clerks they hold a policy.
The hospital clerk can check the policyholder's insurance information through the ledger held by the insurance firm.
Upon the agreement of the policyholder, the system will automatically send proving documentation to the insurer. Then, the insurer is required to check the ledger and pay insurance money to the policyholder.
"The whole process is finished in five seconds after the policyholder agrees," Chung said. Through checking the ledger, the insurer can know whether the policyholder actually paid the medical costs to the hospital or made double claims on a single case.
"Currently, the system will require policyholders to remember which policies they hold," Chung said. "But we believe we can address that too, so policyholders would not have to remember which policies they hold and their details."
According to the firm, it plans to sign deals with major hospitals in Seoul and adjacent areas to start the project by the end of this year. It will cover cases whose insurance money is less than 300,000 won. After testing, the insurer plans to expand the system to large hospitals across the country for all of its policyholders.