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Technology

The Insurtech Industry – How has it developed and what’s the future?

The Insurtech Industry – How has it developed and what’s the future? 3

The Insurtech Industry – How has it developed and what’s the future? 4Find out about the insurtech industry from RNA Analytics’ CEO, Harry Kim, in this recent interview.

Tell us about your career background and how you created RNA Analytics…

I have worked in the insurance industry as an actuary for 33 years, starting my career as a local life insurer in Korea in 1989. Following this, I worked at Milliman and Watson Wyatt as a Senior Actuarial Consultant and Managing Director for 7 years. During these early stages, I was able to acquire an array of skills and knowledge in actuarial practices and risk management. Until 14 years ago, risk and actuarial management had been generally operated separately, but insurers needed to implement new management systems that integrated risk management and actuarial management, after the sub-prime mortgage crisis in 2008. This newly developed management system required complex IT infrastructure and performance and Korea has been well known for its IT advancements over the years. RNA Analytics was set up in 2009 and the risk management and actuarial solutions (AFM) business was acquired from IBM in 2017, to create a fully rounded solution for all requirements. RNA Analytics is now a global actuarial and risk management firm, with offices placed in the United Kingdom, Spain, South Korea, Japan, Hong Kong, Taiwan, Singapore and Thailand.

Can you tell us about your role in RNA Analytics?

My role in RNA Analytics can be broadly divided into three categories:

Firstly, regarding sales, I communicate with Regional Managers and check their sales progress and business strategy for each region. To help them reach their goals, I provide support and also help to expand RNA Analytics to regions such as the United States. I work with the teams to set goals and directions to elevate

the business. The second is developing a cloud solution for digital transformation, that will be the future of RNA Analytics, and preparing for the process by investing in R&D. We’re on the right path focusing on IT development so RNA Analytics can respond to the rapidly changing business environment, which is incredibly important in this growing digital era. Thirdly, I am responsible for making important decisions about the total RNA Analytics Group financial growth, manpower management, investment, and funding.

What are the highlights of your career in RNA Analytics?

The highlight of my career would be the acquisition of an actuarial solution business unit from IBM

and improving and developing the solutions to meet the requirements for new market trends, such as IFRS17,

solvency II, cloud, providing clients with a strong point of difference in this highly competitive market. It’s truly

rewarding to develop solutions to assist our clients as the insurance market continues to evolve.

How has the industry changed over the years?

In previous years, supervisory regulations and accounting systems applied in each country have been carried out as a global integrated model in the 21st century. The change in regulations combined with the industry-wide digital transformation means a completely different insurance landscape compared to even a few years ago. Some of the key industry changes include Solvency II, a risk-based capital regime implemented in the EU in 2016, which means that the overall risk of insurance companies should be quantified and covered by the amount of capital. It is a capital regulation and will be implemented under the names J-ICS and K-ICS in Japan and Korea. Similarly, IFRS 17, the insurance liability sector of the International Accounting Standards, which was centered on the EU, is about to be implemented, and the United States will also prepare for their equivalent of the regulation ‘LDTI’. Unlike the financial environment of the past, the new regulatory environment includes complex financial engineering calculation techniques, massive data volumes, and strict requirements for governance. With new regulations being put into place, insurers in each country are scrambling to change to meet these new requirements.

How has RNA Analytics changed its strategy to address current industry challenges?

As the data demands grow for customers, as does the need to manage this as efficiently as possible. The ability to load vast amounts of data directly into Databases, including directly to Oracle using OCI, has allowed us to grow exponentially, whilst keeping up with our customers’ digital demands. Technology such as this has allowed us to implement advanced strategies to meet the requirements of IFRS 17, which require massive scenario analysis. For a region-specific challenge, Asian insurers with a large number of contracts have dramatically increased the cost and operating hours of their systems. We’ve been able to provide solutions that can reduce time and costs, and we are already preparing a development process to support cloud based systems, taking into account the rapid response to new markets such as APAC and future market changes, and the IFRS 17 Winback strategy built with other existing solutions.

With the transition to IFRS 17 and LDTI pending, what advice would you give to customers who are unsure about this change?

The implementation of IFRS 17 (International Financial Reporting Standards 17) and Long Duration Targeted Insurance (LDTI) in the United States is a desirable outcome, in terms of increasing the usefulness and comparability of accounting information through internationally unified accounting standards. However, some delays in implementing IFRS 17 have shown that it’s not so straightforward for companies to adhere to these changes, due to the difficulty of establishing an operating system in accordance with IFRS 17 standards and applying accounting standards that reflect market valuation. As capital markets open up and capital flows frequently, different accounting standards between countries have a prevalent need for uniform accounting standards and the application of reasonable accounting recognition by fair value or market value requirements.

What is the future of InsurTech?

With the introduction of InsurTech, the existing operation methods, product development, and customer management have been completely redesigned, enabling the provision of higher-level services. With the advent of InsurTech, the business model of the insurance industry can be transformed. There are currently vast amounts of technology developments and innovations happening, especially within the insurance sector. As the world we live in becomes more digital so does the resources required. Insurance counselling tasks can now be handled by robots, and safe payment systems using blockchain are making an appearance. At RNA Analytics, we are constantly developing and innovating our technologies to ensure the best service for our customers. The insurance sector is continuing to modernize and traditional processes are being modified to fit these technological advances.

What is one thing you can advise anyone starting within the industry?

I advise anyone who is starting out in the insurance industry to keep being creative and to bring fresh and pioneering ideas to the table. As the industry develops and modernizes, it’s important for the next generation who are commencing their insurance careers to help the industry to further evolve. If you’re looking for an industry that’s exciting and revolutionary within its field then Insurtech is definitely the place for you.

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