Over 40% of Korean Teens at Risk of Smartphone Addiction, Study Finds

More than 4 out of 10 (43%) Korean teenagers are projected to be in a state of smartphone over-reliance by 2025. According to a report by the Insurance Research Institute, this figure is significantly higher than that for young children (26%), adults (22.3%), and individuals in their 60s (11.5%). The report identifies the short-form-centric social media structure as a major cause of smartphone over-reliance among adolescents. It analyzes that algorithm recommendations and 'infinite scroll' features increase user engagement time and stimulate desires for comparison and validation, potentially leading to depression, anxiety, sleep disorders, and reduced attention spans.

Last March, a US court ordered approximately $6 million in compensation, recognizing that the design of YouTube and Instagram induced adolescent addiction. This case is considered the first to deem design elements like 'infinite scroll' as defects. Various countries are strengthening policies to combat digital addiction. Australia and France have introduced regulations, including banning or restricting social media use for minors and prohibiting mobile phone use in schools. The European Union (EU) is considering regulations for addiction-inducing features such as infinite scrolling and auto-play. Japan and South Korea are enhancing responses focused on time limits and education.

The Insurance Research Institute analyzed that the shift from viewing digital addiction as an individual behavioral issue to extending it to platform design responsibility could pose new risks to the insurance industry. Key variables identified include an increase in medical and disability insurance claims due to deteriorating mental health and the potential for expanded liability claims against platform companies. This could heighten the uncertainty in insurance underwriting and claims assessment.

The Insurance Research Institute has analyzed that these changes are expanding the issue of digital addiction beyond individual usage patterns to a problem of platform design and responsibility. Consequently, the insurance industry has begun to recognize this as a new risk. Key variables cited include increased claims for medical and disability insurance due to deteriorating mental health and the potential for expanded liability claims against platform companies. Digital addiction in adolescence can lead to long-term illnesses or loss of workforce, potentially contributing to prolonged and cumulative insurance payouts. The absence of clear diagnostic criteria and the complex interplay with existing mental health conditions contribute to increased uncertainty in insurance underwriting and claims assessment.

The expansion of platform liability could also impact the insurance market. Disputes may increase regarding the scope of coverage for digital addiction and mental health damages under various policies such as General Liability (GL), Cyber Insurance, Technology Errors & Omissions (Tech E&O), and Directors & Officers (D&O) liability insurance. Analyses suggest that platform design elements like algorithm structures, user retention mechanisms, and adolescent protection features may become new criteria for insurance underwriting.

The Insurance Research Institute has analyzed that digital behavioral addiction tends to accumulate risk gradually rather than materializing into insurance products in the short term. It is crucial to continuously monitor the damages and ripple effects caused by smartphone over-reliance among adolescents.