Bomapp aims to disrupt insurance markets

Bomapp CEO Jay Ryu / Courtesy of Bomapp

Insurtech firm motivates consumers to design products

By Kim Bo-eun

Insurance has been one of the industries that has mostly remained unchanged for the past century. By employing agents, insurers have sold policies to customers, many of whom signed up for unnecessary policies. This was based, to a certain extent, on exploitation of the complexity of insurance policies.

Many in the industry still believe sales only takes place when this is forced upon consumers. However, insurtech firm Bomapp's CEO Jay Ryu says this is not necessarily the case.

"There is generally a lot of distrust in the industry of insurance, based on sales practices that have been conducted up until now," Ryu told The Korea Times in a recent interview.

"The existing channel through which insurance is sold has resulted in insurers basically offering the same products, making sales simply through differentiated marketing."

The problems with the existing sales channel is what prompted Ryu, who worked in the insurance industry, to establish Bomapp in 2015.

Ryu noted that young consumers are different from older customers.

"They have much better searching capabilities, by which they proactively seek products they need," he said. “For example, moms-to-be search for policies for their unborn child on online communities.”

Consumers now also purchase insurance policies as gifts for friends on digital platforms that have emerged.

Ryu also noted that consumers are also much more digital-oriented.

Bomapp operated a platform where policy holders rated sales agents, but Ryu said he decided to scrap the application, as the two entities were found not to communicate much.

“We found that there are many instances in which policyholders seek out their agents after signing up, but find out that agent has left. This is not surprising as the agents are on their job for an average of two years,” he said.

“There is definitely a trend toward digital transactions."

Ryu said consumers have been unable to access better policies due to the absence of a necessary channel that is able to motivate insurers to come up with differentiated products.

Bomapp is seeking to serve as this channel.

Can insurance go 100% online?

Ryu audaciously states that his goal is to take insurance 100 percent online.

This goes back to the question of whether insurers can maintain their level of sales after eliminating the role of agents. This appears possible in the case of simple policies that cover for trips or weddings.

However, in the case of long-term policies such as life insurance, it appears unlikely consumers will be willing to go through extensive insurance agreements by themselves to sign up for such a policy.

Bomapp is seeking to become a game-changer, by breaking up such long-term policies, into lighter, more personalized policies.

"Basically, what we're are aiming for is to come up with personalized policies, based on the data we have," Ryu said. "For example, a customer may want to seek coverage for only a certain type of cancer."

Bomapp is working with insurers to launch such policies, one of which is set to be available on the insurtech platform by June.

"It is a win-win situation for consumers and insurers as consumers can get the policies they need at lower costs, and insurers are able to offer better, differentiated products," Ryu noted.

Since Bomapp was established, it has focused on setting itself as a platform for insurance customers. On Bomapp, customers are able to view all of the policies they hold at a glance. They can sign up for policies and also seek claims.

Currently, Bomapp offers simple insurance policies such as those covering trips and weddings. The platform is processing claims for policies its customers hold. About 15,000 claims are filed on Bomapp each month.

Overseas business

While Bomapp is still in the early stages of its business, Ryu is also eyeing opportunities in Southeast Asia's emerging markets.

"While the insurance market in such countries is entirely different from that of Korea, information technology is growing rapidly," he said.

"The growth in consumer spending will drive contactless payment, which will then lead to the digitization of financial services."

"Growth in spending will also drive demand for insurance. If insurtech is applied, this will bring consumers directly into a digital-based insurance market," Ryu said.

According to Ryu, insurers in these markets have reached out for database and customer management services.

Bomapp plans to work together with them, in offering services there.

"Since insurance is a regulated industry, it is difficult for us to head out alone. This is why we are partnering with local entities."

Ryu explained Bomapp is developing in the local and overseas markets simultaneously, as the latter is "all about timing."

"The term insurtech was entirely unfamiliar here when Bomapp launched in 2015, but now it is catching on," Ryu said.

"This will also be the case in emerging markets in Southeast Asia, and then it will be about who was first to set foot in the market."

Posters on the glass walls of Bomapp state principles according to which employees work. The first two say “work proactively, and start first.”

Bomapp

Young and energetic employees clad in Bomapp hoodies filled the hallway on the day this reporter interviewed Ryu. It happened to be the day Bomapp held a company-wide workshop.

"We shared our objectives for this year, and how this will be achieved, by setting up tasks for every three months," Ryu said.

"We also recognized a developer who has been with us for three years, which is noteworthy considering how many offers developers get."

Ryu said Bomapp is an IT firm, which discourages insurance company-centered thinking.

"Since we are taking a road no one else has taken, our motto is to speedily make new attempts, give up when it doesn't work and move on to the next thing."