Competition to Launch Digital Non-Life Insurers... Will They Become the 'Meggi' to Revive the Stagnant Non-Life Insurance Industry?

Changes Brought by Big Tech's Entry into the Insurance Industry

[Asia Economy Reporter Oh Hyung-gil] Big tech companies such as Naver and Kakao are stepping into the insurance sector.

Following Carrot General Insurance, the 'first digital non-life insurance company' launched last year, new entrants are expected to emerge, drawing attention as potential 'catalysts' to revitalize the stagnant non-life insurance industry.

According to the insurance industry on the 9th, Kakao Pay has applied for preliminary approval from financial authorities to establish a digital non-life insurance company and plans to complete administrative procedures aiming for final approval and launch in the second half of the year.

As of the third quarter of last year, Kakao Pay had accumulated 35 million subscribers, and it is expected to secure competitiveness in the insurance field by leveraging its powerful platform.

Kakao Pay entered the insurance market in 2019 by acquiring Inbyu, a GA (General Agency) insurance service platform. The insurance recommendation service launched with Inbyu allows subscribers to select and subscribe to existing insurance products with the coverage and amount they need. Since last year, Kakao Pay has been selling cancer insurance and pet insurance through its simple insurance service.

If it obtains the full license within this year, it is expected to focus on short-term and small-amount insurance sectors, including automobile insurance.

Naver launched an insurance-specialized corporation, 'NF Insurance Service,' through its financial subsidiary Naver Financial last year. NF Insurance Service operates a 'mandatory insurance education service for small business owners.'

However, Naver has shown no further moves to expand. It is analyzed that Naver is holding back amid conflicts with some non-life insurers over automobile insurance commissions.

Emphasizing Digital, but the Core is 'Customer Contact'

Currently, the domestic digital non-life insurance companies are Carrot General Insurance and Hana General Insurance. If Kakao Pay succeeds in entering the insurance business, it will become the third digital non-life insurance company in Korea.

Recently, Carrot General Insurance opened a 'Per-Mile Auto Insurance QR Branch' in major subway stations in downtown Seoul. This feature allows customers to easily estimate insurance premiums and subscribe to insurance through smart devices.

Carrot General Insurance attracted attention early on by launching a new concept product where premiums are paid according to the driving distance. However, as an insurer without offline branches, it shows that securing customer contact points cannot be ignored.

At the same time, it also proves that the Kakao platform will be a significant competitive advantage for the insurance company launched by Kakao Pay.

Insurers have mixed views on Kakao Pay's entry into insurance. There are concerns that products linked to Kakao services could pose a considerable threat, as well as predictions that it might not overcome the barriers of existing insurers and settle as just another digital non-life insurer.

An industry insider said, "Digital non-life insurers have pursued different strategies from existing insurers with small-amount insurance and innovative products," adding, "If Kakao Pay successfully settles, it could become a catalyst leading other fintech companies into the insurance market."

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