Insurance Industry on High Alert over Medical Innovation... Advanced Risk Assessment Emerges as Key Challenge

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As artificial intelligence (AI)-based diagnostic technology and medical innovations such as obesity treatments rapidly proliferate, the winds of change are sweeping through the insurance industry. With earlier disease detection and prevention now possible, there is growing analysis that a comprehensive redesign of the coverage structure and claims payment systems of major insurance products is becoming increasingly necessary.

According to the insurance industry on June 6, advancements in medical technology—including AI diagnostics, obesity medications, and gene therapies—are expected to bring changes to the risk assessment and coverage structure of insurance products.

In particular, the development of early diagnostic technologies is expected to enhance insurers’ accuracy in risk evaluation. For example, AI-powered image analysis can be utilized to detect subtle abnormalities, such as early tumors or microbleeds, at an early stage using computed tomography (CT) or magnetic resonance imaging (MRI). Additionally, multi-cancer early detection (MCED), which analyzes molecular signals in the blood to simultaneously identify various types of cancer, is garnering significant attention.

Along with this, the insurance industry is viewing the spread of glucagon-like peptide-1 (GLP-1) agonist therapies as a key variable. Although GLP-1 was originally developed as a treatment for type 2 diabetes, its efficacy in obesity treatment has been confirmed, leading to an expanded range of applications. In the short term, the increased prescription of high-cost obesity and chronic disease medications could raise the burden of insurance payouts. However, in the long term, it is expected to help prevent the onset of diabetes and reduce overall medical expenditures.

In the life insurance sector, advances in medical technology could have a positive impact. As gene therapy, cell therapy, and cancer treatment technologies develop, life expectancy may increase and mortality rates may decline.

Changes are also expected in living benefit products. For example, as early diagnostic technologies advance, there are more cases of detecting critical illnesses in their early stages, which raises the need to review definitions of diseases and claims payment standards for critical illness (CI) insurance.

Additionally, in the case of long-term care insurance, advancements in dementia treatment and diagnostic technologies may allow customers to assess their health status at an earlier stage. This could help close protection gaps in long-term care coverage through the development of cost-sharing products.

Industry experts analyze that as medical innovation accelerates, insurers need to embark on a comprehensive redesign of coverage scope, product structure, and cost systems. Yerim Hong, a research fellow at the Korea Insurance Research Institute, stated, "Insurance underwriting should move away from a one-time assessment at the point of enrollment and transition to a dynamic method that continuously reflects changes in the customer's health status." She added, "As the use of genetic and personal health information expands, it will also be crucial to prepare measures addressing issues of information protection and fairness."

This content was produced with the assistance of AI translation services.