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| KakaoPay CEO Ryu Young-joon |
The nation's IT giant duo Naver and Kakao are set to launch an insurance unit by the end of the year in a bid to diversify their business portfolio, the firms said.
Utilizing their IT platforms to attract customers, especially young ones who are more familiar with non-face-to-face financial services, Naver and Kakao said they plan to introduce their insurance products as early as the first half of next year.
Naver said it will carve its Naver Pay division up to establish a financial subsidiary in November. Mirae Asset Daewoo, the nation's largest securities firm by assets, promised to invest 500 billion won ($423.3 million) to help Naver set up a comprehensive financial platform.
Under the platform, customers are expected to not only buy insurance products but also get a loan via its non-face-to-face service.
"The two firms' partnership will create various opportunities in payment, insurance and loans," said IBK Securities researcher Lee Seung-hoon.
KakaoPay, Kakao's online wire transfer operator unit, also acquired cloud-based insurance platform Insurance By You (INBYU) in July. Kakao said it plans to launch its insurance business by the end of the year.
It added it aims at introducing more customer-centered comprehensive financial service platform by assimilating its KakaoPay platform with INBYU.
Following Naver and Kakao's lead, Hanwha General Insurance said it will also introduce its online-only non-life insurance unit Carrot General Insurance under partnership with Hyundai Motor and SK Telecom.
SK Telecom and venture capital Altos each invested in a 9.9 percent stake to establish the firm. Korea's largest carmaker Hyundai Motor also owns a 5.1 percent stake.
Utilizing SK Telecom's navigation app T Map and its big data, the firm will analyze customers' driving range and habits to determine each car insurance policyholder's premium. The premium will be up to 30 percent cheaper than those offered by existing car insurance products, according to a Hanwha General official.
The firm will also give a discount to safe drivers based on the analysis.
"The nation's insurance business is already a red ocean, but the online insurance market is steadily growing since an increasing number of young customers in their 20s and 30s are buying insurance products via non-face-to-face channels," said an industry insider who asked not to be named.
"Customers now enjoy financial platforms that compare and recommend various insurance products from different firms. Younger generations in their 20s and 30s don't buy insurance products via telephone anymore."





































