Insurance Also Compared and Recommended on Platforms... Increased Competition in the Car Insurance Market

Platform Launch Expected Early Next Year
Active Comparisons Already Underway for Car Insurance, Competition Expected to Intensify

The financial authorities have newly designated the 'insurance product comparison and recommendation service' as an innovative financial service. Various insurance products are expected to engage in a 'real showdown' on big tech platforms such as Naver, Kakao, and Toss. In particular, competition is anticipated to become more intense in the automobile insurance sector, which has the largest market size among the products allowed on these platforms.

According to the industry on the 20th, Naver Financial, Bank Salad, Viva Republica (operator of Toss), SK Planet, NHN Payco, Kakao Pay, Kukon, Finda, Fink, Habit Factory, and Hecto Data are expected to launch insurance product comparison and recommendation services as early as the beginning of next year. The Financial Services Commission designated these services as innovative financial services yesterday, allowing them to operate officially. Like general products, insurance products can now be directly compared and recommended on platforms.

The products permitted for comparison and recommendation by the financial authorities include travel and fire insurance, automobile insurance, indemnity health insurance, savings insurance (excluding pension insurance), pet insurance, and credit insurance. Comparisons are expected to be more active for automobile insurance, travel insurance, and pet insurance, rather than indemnity insurance and savings insurance, where differences between individual products are not significant.

In particular, the industry expects fierce competition in automobile insurance, which has the largest market size among these. Automobile insurance is mandatory and must be renewed annually. Since consumers have already been selecting advantageous insurers by checking premiums, special contracts, and discount benefits, it is anticipated that the insurance comparison and recommendation services will be most actively utilized here. Attention is focused on whether the market structure dominated by the 'Big 4' major companies will change. According to the General Insurance Association, automobile insurance sales (gross premiums written) of 14 general insurers amounted to 5.2843 trillion KRW in the first quarter of this year. Among them, the 'Big 4'?Samsung Fire & Marine Insurance, DB Insurance, Hyundai Marine & Fire Insurance, and KB Insurance?accounted for 4.4676 trillion KRW, representing 84.5% of total sales.

Since automobile insurance has recently turned profitable from perennial losses and there is room in the loss ratio (the ratio of claims paid to premiums received), general insurers are expected to aggressively expand their market share. According to the industry, the cumulative loss ratio for automobile insurance in the first half of this year was in the 70% range not only for the Big 4 but also for Meritz Fire & Marine Insurance, Hanwha General Insurance, and Lotte Insurance. Typically, the loss ratio range where insurers do not incur losses in automobile insurance is about 78?82%. A representative from the general insurance industry said, "Until now, users have compared by directly checking each company, but with the emergence of platforms, it will be easier to compare more thoroughly. Large companies will strive to maintain their market share, and small and medium-sized companies will see this as an opportunity and actively enter the market."

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