Emergence for South Korea’s Online Life Insurance
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6 February 2015KyongSun Kong
Last year, South Korea’s first online dedicated life insurer, named Kyobo Lifeplanet Insurance was launched. Kyobo Lifeplanet Insurance is a subsidiary of Kyobo Life Insurance, third largest life insurer in South Korea. This year, four mid-tier life insurers are in preparation for launching online insurance. In South Korea, online life insurance market is far and away immature. It will be difficult for online life insurance to get traction in the nation although other online financial services like banking services and brokerage services have already been saturated. South Korea’s online life insurers should strategically design their insurance products in line with the characteristics of the online channel. Online channel is easy for customers to get in touch with an insurer but it may be difficult for them to purchase insurance without any in-person communication. The coverage period of life insurance is usually longer than P&C insurance, and is a more significant decision for the consumer. Therefore, customers are likely more sensitive about purchasing life insurance online. Online insurance products must be simple and clear to help customers understand and purchase them easily. Online insurers should choose which products are appropriate for online sales and how they should design products for online sales. Seen in some cases abroad, online life insurance is not easy to grow in the market. However, Celent believes that there are niche spaces for online insurers. The time has come to select various ways of financial services, so-called omni-channels. Niche players must be welcomed and required in the South Korean insurance market. If they have a proper strategy for online insurance, they are sure to grow in the future.