Fintech firms rush to enter insurance biz
KakaoPay, a fintech arm of Kakao Corp., has formed strategic ties with online insurance purchase platform Inbyu, short for “insurance by you,” to enter the insurance market.
Under the strategic alliance, KakaoPay will provide its well-established, tightly integrated platform for Inbyu to offer an array of overseas travel insurance packages.
Subscribers are able to choose insurance terms for possible accidents against which they want insurance coverage, instead of having no option but to accept one industry-standardized package.
Bundling all accident causes together has been long criticized as a way for overcharging subscribers by adding oftentimes unnecessary, hard-to-understand conditions to raise costs, something subscribers are unlikely to refuse.
On the platform, real-time information on insurance rates is available from five major non-life insurance firms including Samsung, Hyundai, Meritz, Hanwha and MG.
The digital platform which enables active comparison among service providers is expected to fuel competition among industry players amid a steady increase in the income derived from cyber marketing channels.
According to the General Insurance Association of Korea, the top industry player Samsung Life saw its cyber marketing-derived income in the first three quarters of 2018 account for 9.7 percent of the firm’s total profit, up from 7.8 percent in 2016 and 8 percent in 2017. Samsung Fire & Marine and Kyobo Lifeplanet signed a strategic partnership Jan. 7 with Toss, a financial services platform operated by Viva Republica, in a step towards becoming an industry player.
Market observers largely agree the joint alliance is a clear indication that the Kakao fintech arm will lead aggressive business moves in the insurance market in the months to come.
However, KakaoPay expressed caution in having the strategic partnership interpreted as such.
“KakaoPay is exploring various services that could help improve user convenience. Insurance is one among many such services under review for possible business expansion,” a Kakao official said.