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Digital-based insurance comparison and recommendation services will be expanded to areas including pet insurance, savings plans and travel insurance products, as financial authorities aim to further boost the growth of the local insurance market, according to industry officials, Friday.
Since the Financial Services Commission (FSC), Korea's top financial regulator, promoted and introduced insurance comparison services at various fintech platforms earlier this year, surveyed consumers have reported experiencing increased benefits, such as reduced insurance premiums.
According to data released by the FSC, approximately 120,000 people have utilized car insurance comparison and recommendation services within a month of seven fintech companies launching them in early January. Over 6,100 new insurance contracts were signed during the first month of operation.
The FSC said that about 60 percent of users of the car insurance comparison services said they received recommendations for insurance plans with 30 percent cheaper premiums compared to their existing plans. There has also been a positive assessment from users about the diversified sales channels.
Based on the positive feedback from consumers, the insurance product comparison services available from digital platform companies will be extended to pet insurance markets in April. Other insurance products, such as travel insurance, savings plans and medical expense insurance, will also be sequentially released later this year.
As these products have a higher potential for reaching new contracts than car insurance, platform operators aim to attract customers for these products aggressively.
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Kakao Pay is planning to be the first in the fintech industry to introduce pet insurance to its insurance comparison and recommendation service starting as early as late April or early May.
The mobile payment subsidiary of IT conglomerate Kakao has been holding various meetings with its partner insurance companies, such as Samsung Fire & Marine Insurance, Meritz Fire & Marine Insurance, DB Insurance, Hyundai Marine & Fire Insurance and KB Insurance, in preparation for the launch of the pet insurance comparison service in the second quarter this year.
Naver Pay and Toss, Kakao Pay's major competitors, are preparing to offer pet insurance comparison services in the second half of this year.
Considering the country's average pet insurance subscription rate stands at only around 1.4 percent out of 7.99 million pets — the estimated number of pets in the country — pet insurance is seen as one of the insurance products with the highest growth potential.
The total number of pet insurance contracts held by 10 major insurance companies, including NH NongHyup, Lotte, Meritz, Samsung, Carrot, Hanwha and Hyundai, as of the end of last year, has seen a 51.7 percent jump from the previous year.
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While Kakao Pay will be the first digital platform to offer a pet insurance comparison service, Naver Pay is planning to offer a mobile comparison service for savings insurance plans as early as June.
Nine life insurance companies including the top three — Samsung Life, Hanwha Life and Kyobo Life — are expected to newly provide savings plan products.
Naver Pay initially planned to focus on launching medical expense insurance and overseas travel insurance comparison services, yet it changed its plans due to procedural matters. Those insurance comparison services will be introduced during the second quarter of this year.
"Insurance companies and fintech companies will continue to cooperate by expanding the scope of information sharing for accurate insurance premium calculations and jointly enhance commission systems while addressing inconveniences raised by users," an official from the FSC said.