By Kim Tae-jong
Kyobo Life Insurance, one of the nation’s top three insurers, plans to file an application to establish an online life insurance affiliate.
“We’re considering an online-based life insurance affiliate,” an official from the insurance firm said. “We will soon file an application to the financial authorities.”
He explained that the decision came as an effort to attract more young customers who are familiar with Internet shopping.
“The affiliate will focus on developing new insurance products that can appeal to young customers in their 20s and 30s and procedures will be simplified given the characteristics of the Internet,” he said.
According to recent data, the online insurance market has seen about 10 percent growth every year, thanks to the increasing number of people who use the Internet.
Market insiders say that Kyobo’s move comes in a bid to take a bigger share in the growing online market and bring about positive changes in the industry, given its market position.
Kyobo Insurance’s net profit marked 545 billion won last year, and its total assets are over 360 billion won.
“Changes in the life insurance industry tend to be made very slowly,” said Lee Chul-ho, analyst at Korea Investment and Securities. “But Kyobo’s decision will have an impact on the industry in the long-term prospective.”
It may be seen as an inevitable choice because life insurers are now required to reduce costs, mainly associated with salesmen, in selling their products in order to increase profits, he said.
“As seen in the non-life insurance market where a lot of firms have introduced online-only products, many life insurers will also join Kyobo and come up with many savings-oriented life insurance products,” he said.