'Insurance Industry Entry' Kakao Pay... Will It Shake Up the Market?

Preliminary Approval Application for Digital Non-Life Insurance Company

[Asia Economy Reporter Oh Hyung-gil] As Kakao Pay independently moves to establish a digital non-life insurance company, the insurance industry is closely watching the changes that 'big tech' (large information and communication companies) with powerful platforms may bring.

According to the financial sector on the 5th, Kakao Pay applied for a preliminary license for a digital non-life insurer to the Financial Services Commission on the 29th of last month. Kakao Pay will hold management rights as the major shareholder, and Kakao will participate as a strategic investor. They plan to prepare for corporate establishment and final approval in the second half of this year. If Kakao Pay obtains the full insurance license this year, it will become the third digital non-life insurer in Korea, following Carrot General Insurance and Hana General Insurance.

Kakao Pay stated, "Based on 'InsurTech' (a combination of insurance and technology) that protects users from everyday risks, we will create new innovations, improve awareness of insurance, and lead efforts to resolve insurance blind spots." They also aim to build a rational value chain by partnering with InsurTech, Kakao Pay's corporate agency (GA).

Previously, Kakao Pay attempted to establish a digital non-life insurer in partnership with Samsung Fire & Marine Insurance, but the plan fell through due to disagreements over the launch of online auto insurance. Since then, Kakao Pay has been preparing to establish a digital non-life insurer independently.

Based on the large platform 'KakaoTalk,' Kakao Pay is expected to start its business in auto insurance and short-term, small-amount insurance sectors. The insurance industry predicts that it will not be easy for Kakao Pay to catch up with existing insurers in a short period. However, it is expected to bring new changes to the insurance industry based on customer accessibility.

An insurance industry official said, "Insurance is chosen based on more conservative standards than general financial products, considering various factors from subscription to accident handling and compensation," but added, "The advantage is that the 20s and 30s generation, who are more familiar with financial platforms, can access it comfortably compared to existing digital non-life insurers."

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