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| The headquarters of Kakao Pay / Courtesy of Kakao Pay |
By Anna J. Park
Kakao Pay Insurance officially launches its very first insurance plan this week, aiming to solidify its position as the country's representative fintech-led digital non-life insurer. It took six months for the digital insurer to come up with its first product, since the country's financial regulator, the Financial Services Commission (FSC), gave the green light to the firm to enter the insurance sector. It is the first case of a local IT platform giant advancing into the insurance industry.
Boasting strength in IT-based technologies, the company's first insurance product protects insurance holders from cyber financial crimes, such as various online phishing scams and online commerce fraud. Holders of the insurance plan can receive compensation before the financial authority makes judgment calls concerning damage reimbursements. The new insurance plan is expected to shorten the average amount of time it takes to reimburse any damages from online financial fraud by more than two months, compared to other local insurance products.
Kakao Pay Insurance explained that the product aims to be loyal to the core spirit of the firm, and that insurance holders can get benefits together by solving social problems through insurance technologies. The first insurance plan is a collective one, where only a group of holders can sign the plans collectively, but new insurance products that individual holders can join are slated to be released by the end of the year. The firm added that although the plan is collective in nature, subscribers can claim their coverage through a mobile messenger platform, which shows clear distinctions from other collective insurance plans.
"When preparing the launch of the first insurance product, all crew members strived to deliver the very core value that we seek; the company hoped to make every holder jointly benefit from the plan, as we seek to solve key problems through technology," Choi Sae-hoon, the CEO of Kakao Pay Insurance, said.
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| Kakao Pay Insurance CEO Choi Sae-hoon / Courtesy of Kakao Pay Insurance |
As Kakao's financial affiliates have sent shockwaves through traditional financial industries ― ranging from banking, to payments and securities ― with their innovative approaches and streamlined services, traditional insurers are paying close attention to the digital insurer's moves.
Market watchers expect Kakao Pay Insurance to change the local insurance sector's landscape and have a deeper impact than other digital non-life insurers, such as Carrot General Insurance and Shinhan EZ Insurance.
So far, digital insurers' presence in the local insurance industry has been minimal, as the three existing digital insurers still logged annual losses as of the end of last year. Yet, Kakao Pay Insurance is estimated to have the potential to shake up the entire market, with Kakao Talk Messenger's monthly active users (MAU) reaching over 50 million and Kakao Pay's members exceeding 38 million, which is some 75 percent of Korea's population. The company's ambitious business plans to streamline insurance processes through reliance on IT technology also challenges existing peer companies.
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