'Platform Leader' Naver Enters Insurance Market... Insurance Industry on Edge

Naver Discusses Pilot Operation of Travel Insurance Comparison and Recommendation Service with Insurers
Concerns Over Excessive Competition and Decrease in Planner Jobs

[Asia Economy Reporter Changhwan Lee] As Naver's entry into the insurance market becomes more visible, insurance companies are becoming highly anxious. Naver plans to first leverage the advantages of its portal to launch an insurance product comparison and recommendation service, but the insurance industry is concerned about commission rates, excessive competition, and the reduction of insurance agents' jobs.

According to the insurance industry on the 28th, Naver is preparing to pilot a comparison recommendation service for certain insurance products, such as travel insurance, through its subsidiary Naver Financial.

Hyundai Marine & Fire Insurance, DB Insurance, KB Insurance, Lotte Insurance, and Carrot Insurance are discussing listing their travel insurance products on Naver. If these companies introduce travel insurance products through Naver, consumers can choose and subscribe to the product they prefer. Naver receives a certain commission from the insurance companies and plays the role of introducing the products.

Starting with travel insurance, it is expected that mainly easy-to-subscribe products such as automobile insurance, driver insurance, golf insurance, and bicycle insurance will be additionally listed. Products with complex structures and concerns about incomplete sales, such as life insurance, variable insurance, and whole life insurance, are likely to have their platform listing postponed for the time being.

The government expects that Naver's entry into the insurance industry will improve consumers' access to insurance products. Even if consumers want to subscribe to insurance products, it was difficult to know which company's product was better, but the comparison recommendation service is expected to improve consumer benefits.

However, the insurance companies' feelings about this are complicated. While expanding the sales network of insurance products is positive, there are concerns about profitability decline due to excessive competition, increased dependence on portals, and an increase in incomplete sales.

There is also concern that competition within the portal will reduce the profitability of insurance products, and only the online platforms receiving commissions will benefit in the process. Currently, the Financial Services Commission is listening to opinions from insurance companies and the fintech industry regarding online commission rates and is preparing guidelines.

An official from an insurance company said, "There is a possibility that Naver, in a dominant position, may impose unfavorable conditions on insurance companies," adding, "Commission rates are an issue, but as the market grows, there is also concern that insurance companies may become dependent on Naver."

However, Naver emphasized that it does not want conflicts with insurance companies and has no plans to take excessive profits. A Naver Financial official explained, "We are currently waiting for the financial authorities' guidelines and are in initial discussions with several insurance companies actively reaching out. We plan to faithfully follow the financial authorities' guidelines to improve consumer benefits."

On the other hand, the issue of job reduction for insurance agents is also a concern. The GA (General Agency) industry, which mainly relies on agent channels, is strongly opposed. The more Naver grows its insurance business, the less necessary offline-focused agents become.

The GA Association and the Insurance Sales Labor Union have held rallies opposing the entry of online platforms into the insurance business and continue one-person protests. Jang Nam-hoon, head of the Korea Insurance Agency Association, said, "The entry of big tech into the insurance industry will seriously threaten the livelihood activities of small-scale insurance agents."

The Korea Insurance Agency Association, along with the insurance agency industry and the insurance sales labor union coalition, held the "2nd Resolution Rally to Block Online Platform Entry into Insurance and to Defend the Livelihoods of Insurance Salespeople" on the 5th in Gwanghwamun, Seoul.

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