The Integrated Risk Management for The Fourth Industrial Revolution: Focus on Korea’s Insurance Industry
Authors:   Asia-Europe Perspective Association, Park Jong-Hyun , Chang Dong-Han 
Published: December 2024

The current risk management is evidently different from the past decades ago and is changing from dealing with the internal risk of organization’s to integrating the organization’s broad strategic objectives in risk management functions. The change in risk management of companies recognizes that internal competencies such as enterprise value creation, growth, and profitability are important factors in determining the competitive advantage of a company by minimizing losses through risk management.
Risk communication began to emerge in response to socially occurring risks. When the scope of risk management is compared with the past, as the role of risk communication becomes prominent, it is evident among many stakeholders that the risk communication perceives a necessary element for managing the risk of the enterprise. That is, the roles and techniques of risk management are becoming more important.
However, the communication-related risks and the Fourth Industrial Revolution have been affecting the economy industry as a whole when increasing IT technology development and the amount of information. So, the future of the insurance industry is also at the center. Risk management, which has evolved along with the past, has been required to evolve more sophisticated forms of integrated risk management system with the introduction of the 4th Industrial Revolution Technology. The 4th Industrial Revolution Technology such as Block Chain, AI, Big Data, ICT, Mobile, IoT, and Digital Technology will have a great influence on the change of the insurance industry environment in Korea. In particular, a competition among products and services of insurance companies such as consumer-oriented customized product development, additional services such as health care, and sales channels will accelerate further.
The purpose of this study is to provide the models that will help Korea’s insurance industry in the future and establish an integrated risk management system at the time of accepting the Fourth Industrial Revolution Technology, and to suggest the regulation and policy direction of the government supervision policy.
The ERM integrated risk management system, which combines the fourth industrial revolution technology with the ERM & internal audit system, can more accurately distinguish, assess, prevent and control all types of risks that are extracted. Above all, the ability to create countermeasures against ‘customized risk’ is the most important feature. The integrated risk management system adopting the fourth industrial revolution is largely in three stages. The first stage is the kind of risk that can occur. The second stage can refer to systemic risk management, or ‘integrated risk management system’. Integrated risk management can be divided into 4th industry technology and ERM & internal audit. The central control unit (CCU), which connects each part and integrally manages risk information, administers all of the risks in the enterprise. The third stage is a performance of integrated risk management. When the fourth industrial revolution technology is introduced to the insurance industry, the policy direction of the supervisory authorities on the problems that may arise is as follows. First, it is necessary to adopt a ‘Hands-off approach’ at this stage in relation to the regulation of the fourth industrial revolution technology. Second, we need to create ‘Test Bed’ system. Third, it is necessary to revise the insurance business law related to review of the regulatory framework centered on the central control system of the Electronic Financial Transactions Act and the recruitment of sales channels. Fourth, strengthened regulatory policies based on consumer protection are needed.