Electronic Signatures in South Korean Insurance: Enabling Paperless Policies

by KyongSun Kong, November 29, 2012
Industry Trends
Asia-Pacific

Abstract

In 2012, South Korea’s insurance industry took the first steps down what promises to be a road to major change. Precipitated by a government announcement allowing electronic signatures on insurance policies and related e-signature guidelines, insurers have rapidly begun to adopt e-signature systems.

In the report, Electronic Signatures in South Korean Insurance: Enabling Paperless Policies, Celent looks at how insurers are responding to the move to allow e-signatures to be legally binding on insurance policies. The report looks at adoption trends and how insurers are looking to take advantage of the e-signature opportunity as well as the anticipated and potential benefits of e-signatures for the industry.

By embracing e-signatures and so-called “smart insurance,” South Korea’s insurers have rapidly taken strides toward becoming increasingly paperless. Insurers that adopted e-signature systems reported the following statistics for the first half of 2012:

  • Monthly increases of 200 to 300% in e-signature policy transaction numbers.
  • As of August 2012, policies signed with e-signatures accounted for 15 to 18% of all policies.

This raises the question: How do South Korean insurers expect to benefit by hopping on the e-signature bandwagon? The primary benefits insurers anticipate are:

  • Heightened efficiency across the entire contract process.
  • Reduced costs.
  • Greater customer satisfaction.
  • Greener IT.

“Beginning with property and casualty insurers and followed by life insurers, companies across the industry are putting in place e-signature systems. However, there are many issues that have to be resolved, including guideline updates and enhancing security,” says KyongSun Kong, an analyst with Celent's Asian Financial Services Group and author of the report.

This report addresses a range of issues needed to facilitate the spread of e-signature use. The report also profiles vendors involved in the adoption of e-signature systems and concludes with a range of proposals for insurers considering adopting such systems in the future.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is part of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

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Asia (Tokyo)
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Table of Contents

Executive Summary

1

South Korea Insurance Industry Overview

2

Guidelines Concerning Adoption of E-Signatures

5

 

Purpose and Scope of Guidelines

5

 

Guidelines for Creating and Issuing Electronic Documents

6

 

Guidelines for Encryption and Preventing Forged, Falsified, and Altered Documents

7

 

Guidelines for Managing Electronic Documents

7

Changes Resulting from E-Signature Adoption

9

 

Changes in Insurance Agent Workflow

9

 

In the Wake of E-Signature Adoption

10

Technology Supplier Trends

16

 

Unidocs

16

 

FORCS

17

 

The Role of the Time Stamp

19

A First Step to Major Change in South Korea’s Insurance Industry

21

 

Heightened Efficiency

21

 

Reduced Costs

22

 

Enhanced Customer Satisfaction

22

 

Green IT

22

Challenges and Issues for the Future

23

 

Guideline Updates and Improvements

23

 

Investing with a Long-Term Strategy

24

 

Enhanced Security

24

 

Maintaining Relationships with Policyholders

25

Conclusion

26

Leveraging Celent’s Expertise

28

 

Support for Financial Institutions

28

 

Support for Vendors

28

Related Celent Research

29

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