KIDI engages in research for practical applications regarding product development and insurance system operations. This type of research allows insurance companies to have a more flexible approach towards new product development, underwriting and marketing in order to meet rapidly changing market demands. In addition, KIDI has been discovering new growth engines for the Korean insurance industry by studying global market trends, advanced insurance systems and policies, pricing methodologies and new product development techniques. The results of such research are provided in detail throughout the insurance industry through seminars and publications for immediate application in day-to-day operations.
The Korean population is aging at an unprecedented rate, and due to the limitations of government funding, the private sector playing a bigger role in social security is becoming the focal point of various discussions. In anticipation of socioeconomic changes resulting from an aging demographic, KIDI is conducting a field-based research to help the insurance industry identify new business opportunities and strengthen its overall competitiveness.
The main tasks regarding aging research are as follows:
- Research on recent reforms related to aging in developed countries
- Development of insurance products specialized for the elderly
- Analysis of longevity risk and its hedging
- Profit and loss analysis for medical insurance in an aging society
The research findings are used to support product development and underwriting guideline revisions, as well as the government’s policy-making activities.
Research on Advanced Pricing and Product Development Methodologies and Strengthening Industry Competitiveness
In a maturing insurance market, insurance companies need to apply a more targeted approach in its marketing efforts to better address the different needs of well-defined market segments. KIDI actively supports insurers to assess risk adequately, through vast amounts of research on local and global risk rates and product development methodologies for the undertaking of substandard risk. KIDI is also researching how to strengthen the insurance industry’s competitiveness against other financial industries under the current trend of financial integration and elimination of intra-sectoral restrictions. Retirement pensions are a typical area where insurance companies, banks and security companies compete against one another. KIDI is conducting research on various topics to strengthen the competitiveness of the insurance industry.
Improving Rate-making Systems and Insurance Clauses
KIDI is actively participating in the improvement of ratemaking systems and insurance policy clauses in cooperation with government organizations and insurance companies to promote reasonable ratemaking. KIDI provides services to improve insurance policy clauses regarding rate systems such as risk classification plans and merit-demerit systems, as well as clauses regarding the scope of coverage, which affects insurance premium levels.
Publications and Policy Proposal
KIDI’s research findings are presented not only in the form of various seminars, but also in the form of publications such as CEO Reports, Life Insurance Product Review Quarterly, Auto Insurance Issue Report Quarterly, Practitioner’s guidebooks, Overseas Market Brief, and monthly KIDI BRIEF, to be utilized by insurance companies and policymakers within the government. In addition, if KIDI’s research findings reveal the need for changes in government policy, then KIDI sends proposals to policymakers. These proposals illustrate the justifications for changes as well as recommendations, to promote policy changes needed.