Trouble from the Start... Samsung Fire & Marine Insurance-Kakao Joint Venture Falls Through

[Asia Economy Reporter Oh Hyung-gil] The joint venture between the top non-life insurance company and the IT giant has ultimately fallen through. The plan to establish a digital non-life insurance company, jointly promoted by Samsung Fire & Marine Insurance and Kakao, failed to reconcile differences and was abandoned.

According to the financial industry on the 27th, Samsung Fire & Marine Insurance and Kakao Pay have decided to dissolve their partnership for the joint establishment of a digital non-life insurer.

Last September, the two companies formed a task force team to establish a digital non-life insurance company and prepared a preliminary approval application to the Financial Services Commission. Kakao Pay was to hold management rights, with Samsung Fire & Marine Insurance and Kakao participating as strategic partners. The shareholding structure was Kakao Pay 50%, Kakao 30%, and Samsung Fire & Marine Insurance 20%.

They planned to sell new lifestyle-oriented insurance products applying fintech technology based on Kakao’s mobile platform. However, opinions diverged over the launch of online automobile insurance.

The core issue was automobile insurance. Kakao argued that if the digital non-life insurer did not sell automobile insurance at the start of the business, it would be like a "steamed bun without filling." Kakao Pay had already introduced products such as indemnity medical insurance and simple insurance products.

Last year, Kakao Pay acquired shares in Inbyu, an insurtech-based corporate insurance agency (GA), establishing a foothold for entering the insurance business. Through this, they launched a "simple insurance" service in October last year, offering insurance products that cover risks in daily life such as overseas travel, sports, studying abroad, and pet insurance.

Additionally, users can view and manage their subscribed insurance products at a glance in the "My Insurance" section. By entering just a few pieces of information, they can compare and select direct automobile insurance products from multiple insurers through the "Automobile Insurance Premium Comparison" service. Besides Samsung Fire & Marine Insurance, they had plans to gradually expand their insurance product lineup and services through partnerships with Hyundai Marine & Fire Insurance, DB Insurance, and others.

Samsung Fire & Marine Insurance also did not concede on automobile insurance. With the share of internet-based direct automobile insurance sales approaching 60%, they needed to avoid competition with the digital non-life insurer in automobile insurance sales.

Although the joint venture ended due to differences over the automobile insurance launch, it remains a precedent showing that collaboration between financial companies is not easy when IT companies enter the financial industry based on platforms. In the insurance industry, there are comments that it was a challenging attempt from the start.

An official from the non-life insurance industry said, "Digital platform operators with vast customer data and accessibility inevitably view finance as a new market," adding, "From the financial companies’ perspective, they see these partners as both collaborators and competitors."

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