Non-face-to-face Insurance Enrollment Down 5%... "Enrollment Process Needs Simplification"

KIRI
'Amendment of the Electronic Signature Act and Activation of Insurance Companies' CM Channels' Report

[Asia Economy Reporter Ki Ha-young] With the abolition of the mandatory public certificate system, there have been calls for institutional support to enable various services utilizing electronic signatures to be activated in the insurance industry as well.

According to the recently published report "Amendment of the Electronic Signature Act and Activation of Insurance Companies' CM Channels" by the Korea Insurance Research Institute on the 2nd, the proportion of subscriptions through cyber marketing (CM) channels in non-life insurance was found to be 4.5% based on premium income in 2019. For life insurance, it was 0.3% (based on first-year premiums in 2019), which is lower than non-life insurance. Even in non-life insurance, excluding auto insurance where online subscriptions are active, the rate is only 0.8%.

The reason why CM insurance sales have not been activated like this is pointed out to be due to issues with accessibility of electronic signatures and the complexity of the contract process compared to other financial products, including notification obligations and explanation duties.

Among these, the mandatory public certificate system was abolished with the enforcement of the amended Electronic Signature Act on the 10th of last month. The public certificate, introduced in 1999, activated non-face-to-face financial transactions but has consistently raised inconveniences such as forced installation of security programs and browser compatibility issues. With this legal amendment, it is expected that the accessibility and reliability of electronic signatures will improve, and non-face-to-face insurance services and insurance sales are also expected to expand.

However, it is pointed out that for the activation of CM channels, not only technological development of electronic signatures but also institutional support is necessary. The same explanation obligations and subscription procedures are applied to simple insurance products as to complex ones, which may make consumers feel the subscription process cumbersome when subscribing to insurance through CM channels.

In fact, according to the "2019 Insurance Consumer Survey," the most inconvenient aspects when subscribing to insurance using CM channels were not the lack of product explanation (20.5%) but rather the burden of detailed information provision (32.0%) or the complexity of the subscription process (29.5%).

The Korea Insurance Research Institute advised, "The system should be improved to simplify the subscription process according to the characteristics of insurance products in CM channels so that consumers can conveniently subscribe to insurance."

This content was produced with the assistance of AI translation services.