South Korea to increase access to digital insurance platforms
The Financial Services Commission (FSC) is in the process of drafting a policy framework to enhance the insurance market in the region
Local platform operators, including the likes of mobile payments service Kakao Pay (which recently applied for a digital non-life insurance licence), will be allowed to enter the insurance market once the FSC pushes the new regulation through as per its ‘sandbox’ programme – a move that will expand customer access to digitised financial products, including microinsurance.
“It is expected that more platform operators will attempt to offer insurance services, while traditional insurance companies will seek business partnerships with digital platforms. The entry of platform operators into the local insurance market will induce market competition and greater consumer choice of insurance products,” the FSC said in a statement.
ITIJ notes that among this ‘greater choice of insurance products’ will no doubt be a wealth of new travel insurance offerings. Seeing as travel insurance customers have shown to prefer a process that is simple, easy and fast (see our ITIJ article on travel insurance distribution channels), digital platforms are well suited to this.
The move from the FSC comes following reports that the market for digital non-life insurance products is expected to grow. In January, for example, Hanwha General Insurance launched Carrot, the market’s first digital non-life insurer, and Samsung Fire & Marine Insurance is reportedly due to launch a digital on-life insurance arm in partnership with Kakao Pay.
“We expect more players to emerge as this is the trend in the industry,” Chung Sung-hee, non-life insurance Research Director at the Korea Insurance Research Institute, said. “This is because the market for traditional non-life insurers has reached saturation and there is also growing demand for simple insurance policies.”