2003, Vol.14, No.3

Journal of Insurance and Finance 2023 KCI Impact Factor : 0.59

pISSN : 2384-3209
https://journal.kci.go.kr/kiri

In this article, we tried a theoretical analysis on issues concerned with purchasing of on-line insurance which competing with off-line one in the information asymmetrical insurance market. We verified the following fact and drew interesting implications about on-line's economical significance as a result of the analysis. 1. Where an on-line insurance characterized by the compensation uncertainty and low pricing etc set up low risker a target market, optimal insurance coverage is the full coverage's off-line insurance to high-risker, while the partial coverage's on-line one to low-risker. Such results imply that we can improve adverse selection problems resulted from asymmetry information, if we can design individually a separating contract so that self-selection mechanism does working. 2. In order to survive on that on-line insurance shows the advantage of low price, as is paradoxical, a excessively low pricing strategy should be sublated. Because more price difference than constant level may cause high-risker's adverse selection 3. So that the inexpensive price in on-line amounts factor to become winner, an exquisite underwriting system should be constructed, which requires investment of huge amount of money. 4. It is the fact that on-line' success is influenced by off-line efficiency as well as on-line itself's one, furthermore influenced efficiency of market whole. 5. We can expect role that restrain injustice contract from consumer's misgiving about that quick and correct service is available like off line when accident occurred.

The purpose of this paper is to provide useful implications for developing multi-channel strategies for insurance companies and bancassurance strategies for banks. In order to find out valuable information on multi-channel strategies the market share of new distribution channels such as DM and bancassurance is forecasted. The reasons for changing distribution channel from traditional one to new ones are also analysed. In terms of the market share, DM channel in the long-term accident insurance, the saving-types insurance, and the whole life insurance will be more than 10% in the long-run. Banks will dominate in the saving-types insurance and the personal pension. With regard to the reasons for changing distribution channel, we consider two aspects: the unsatisfactory factors from the traditional channel and the attractive factors of new channels. The quality of service and the level and coverage of benefits are more important factors than other factors such as the level of premiums, rate of returns, and solicitors' expatiation. The marketing strategies of traditional channel focused on the service and benefits are thus recommended to appeal to customers. The attractive factors of bancassurance and DM are stability and low cost, respectively. It is thus desirable for the new channels to plan marketing strategies emphasizing the attractive factors.

Korean general insurance industry is facing a lot of opportunities and challenges because of deregulation, technology innovation, and globalization. Significant change is underway in the Korean financial sector due to opening up the market to foreign players and other domestic financial services players, changing customer needs and technology shocks. Today's threatening, rapidly changing environment requires insurance companies, especially small-medium size insurance companies to reevaluate their business strategies to survive in a competitive turmoil. To continue to be a insurance service provider in Korean insurance and financial services market, small-medium size players have to build a comprehensive view of likely future competitive landscape, and based on this understanding, a define a set of several strategic priority initiatives and execute against those. For this purpose, this paper first looks at the current trend of Korean domestic general insurance industry, then analyzes problems and opportunities of insurers and finally proposes a set of several strategic priority initiatives for small-medium size insurers to success in the future. Internally, some of the key competition factors are channel efficiency, price and product competition, customer management, and service efficiency. Developing and implementing strategies to survive and prosper for small-medium size insurers will take significant effort, it is clear that outsourcing or partnering with other insures( including life insurers) and other financial institutions will be a critical element for success.