Amid growing concerns over worsening profits, insurance companies in South Korea said Monday they plan to roll out new services, incorporating new technologies such as big data and artificial intelligence.

They also pledged more investments for the emerging technologies and startups.

“Korean insurance firms will utilize new technologies, including AI, in different areas from risk assessment, to have a competitive edge in the face of the looming ‘fourth industrial revolution,’” said General Insurance Association of Korea Chairman Kim Yong-deok, at a press meeting in Seoul. He also anticipated that member companies will also proactively seek mergers and acquisitions with fintech startups.

The recently revised bills on data protection and private information will also accelerate collaboration between established insurance firms and emerging tech companies, he added.

The GIAK is an organization consisting of insurance giants, including Meritz Fire & Marine Insurance, Hanhwa General Insurance, Lotte, Insurance Heungkuk Fire & Marine, and Korean Re.

In addition to the anticipated investments, the GIAK chairman also vowed to eliminate outdated practices in the market to overcome a number of challenges they are facing.

The overall insurance industry, which saw its combined net profit drop for two consecutive years from 3.9 trillion won ($3.4 billion) in 2017 to 3.3 trillion won in 2018, is expected to have suffered a 30 percent drop to 2.3 trillion won in 2019. Saturation of the market and rising insurance premiums are said to be some of the reasons behind the falling profits.

The association said the increasing adoption of emerging technologies, such as AI programs, big data analytic models, and blockchain-based authentication systems, will improve efficiency in the industry while offering convenient services for consumers.

By Kim Young-won (wone0102@heraldcorp.com)