Kakao is planning to expand its insurance services and its move is likely to accelerate the growth of the domestic online insurance market. Insurers aiming to increase their online sales and attract more young customers are looking to participate in Kakao’s platform.
At present, Kakao Pay is discussing cooperation with such insurers to provide its insurance services for more customers. Multiple insurers such as Samsung Fire & Marine Insurance and AXA General Insurance are already marketing their insurance products via Kakao Pay.
The platform is a nice tool for insurers in that their products can be marketed via KakaoTalk, which is an online messenger used by almost all of the population. Kakao receives fees for the platform.
Insurers are favorable to insurance sale via Kakao in spite of the fees. Online non-life insurance sales accounted for 4 percent of the total non-life insurance sales in South Korea in January this year, yet the ratio is likely to rapidly rise given young consumers’ taste. In addition, online insurance products entail no commissions for insurance planners, which means they are better for insurers and customers alike.
Experts predict that Kakao will directly sell insurance products in the future as in the case of Toss and Bank Salad. Viva Republica, which runs Toss, is planning to release products for online and mobile platform users with Hanwha Life Insurance in the first half of this year. Bomapp, a local insurtech firm, is working on an online insurance distribution platform.