Kakao and Naver More Friendly Than Insurance Companies

Announcement of Large Platform-Linked Insurance Service
'ChinsoBija' Praised for Easy Explanation of Mandatory Insurance

[Asia Economy Reporter Oh Hyung-gil] As big tech companies accelerate their entry into the insurance industry, they are launching new services one after another. Leveraging the market dominance based on large platforms with many customers, they boldly choose approaches different from traditional insurers. Experts advise that while insurance companies compete through digital innovation, they should also refer to big tech business models to create new revenue bases.

According to the industry on the 22nd, Kakao Pay recently applied to financial authorities for the official approval of its digital non-life insurance company, ‘Kakao Pay Insurance.’ The plan is to offer insurance services linked to Kakao’s existing platforms.

It is known that they are planning taxi, bike, and designated driver insurance linked with Kakao Mobility, as well as return shipping insurance connected with Kakao Commerce. Initially, the focus will be on small, short-term insurance products closely related to daily life, with plans to expand the portfolio to full-scale long-term insurance such as mobility (auto insurance) and health insurance later.

Since they have directly entered the insurance business rather than partnering with existing insurers, the differentiation from traditional insurers is a key point to watch in the early market establishment phase. The insurance industry expects significant influence in insurance sales due to their platform roots but sees risk management, such as claims adjustment and loss ratios, as critical factors.

Naver Financial chose insurance brokerage by registering an insurance agency (GA) corporation named ‘NF Insurance Service’ with the court in June last year. In particular, the recently launched insurance service for small and medium-sized business owners, ‘Boss’s Mandatory Insurance Guide,’ has received great responses from businesses using Naver as a sales channel.

It features simple and clear explanations about mandatory insurance that business owners must subscribe to, such as personal information protection, disaster liability, and fire insurance. Although these products have already been sold by insurers, business owners previously had to search for the necessary insurance for their business or industry one by one on public institution websites.

In contrast, Naver provides key information such as mandatory subscription targets, penalties for non-subscription, and insurance premiums in a clear and concise manner, fulfilling a new role as a sales channel. Currently, it is linked to the sale of products from four companies: Samsung Fire & Marine Insurance, Hyundai Marine & Fire Insurance, KB Insurance, and Heungkuk Fire & Marine Insurance, but the potential for expansion remains open.

Hwang In-chang, a research fellow at the Korea Insurance Research Institute, said, "If big tech companies obtain insurance company licenses and enter the insurance business, they could develop and sell new products or services using data and technology, potentially causing insurance companies to lose potential customers, especially the MZ generation (Millennials + Generation Z). Even in cases of partnership sales, they will hold superior market dominance." He advised, "Insurance companies should strengthen customer contact points, build partnerships with IT companies, and foster digital finance talent."

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