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Home » Digital non-life insurance market set to grow – Korea Times

Digital non-life insurance market set to grow – Korea Times

By Kim Bo-eun

The image provided by Hanwha General Insurance's digital non-life insurer Carrot shows a customer checking insurance premium rates on a mobile phone / Courtesy of Carrot
The image provided by Hanwha General Insurance’s digital non-life insurer Carrot shows a customer checking insurance premium rates on a mobile phone / Courtesy of Carrot

The market for digital non-life insurers is set to grow, as traditional non-life insurers face a saturated market here. Hanwha General Insurance launched Korea’s first digital non-life insurer “Carrot” last month, and more players are set to emerge.

Unlike banks, which are able to offer the same products for retail customers on digital channels, non-life insurers offer a different type of insurance policies on online channels.

Traditional non-life insurance policies are defined by long-term coverage and high costs and tend to be complicated; therefore face-to-face sales are effective.

Digital channels offer more simple policies such as travel insurance. Agents do not sell such products as the costs to employ agents exceeds the profits generated from the simple policies.

Samsung Fire & Marine Insurance is readying to launch a digital non-life insurer with financial services platform Kakao Pay. The joint venture is set to apply for preliminary approval from financial authorities next month.

Hana Financial Group, which has taken over The-K Non-Life Insurance, has pledged to turn the firm into a digital insurer.

“We expect more players to emerge as this is the trend in the industry,” Korea Insurance Research Institute’s Non-life Insurance Research Director Chung Sung-hee, said.

“This is because the market for traditional non-life insurers has reached saturation and there is also growing demand for simple insurance policies.”

The premium for simple insurance policies is significantly lower than that of traditional insurance policies which makes them less profitable, but non-life insurers are opting to launch digital models selling these in addition to their traditional businesses.

Selling insurance online works for simple policies as consumers tend to seek them out when needed. This is in contrast to traditional insurance policies, which consumers do not tend to buy unless approached by sales agents.

“Consumers also have become more likely to sign up for simple insurance policies as advertisements are visible on the online platforms they access,” Chung said.

This is why internet giants such as Kakao and Naver are eager to extend their range of services to offer insurance policies. Both are seeking online financial platform businesses, and the traffic the platforms generate creates opportunities for them to sell a diverse range of products including insurance.

“Insurers cannot operate a digital business on their own. They need to join hands with digital businesses, because the latter are the point of contact with potential customers and they also hold massive amounts of customer data,” the chief researcher said.

Source: Google Insurane

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