South Korean internet giant Kakao has received regulatory approval to launch its own digital insurance business, according to a report by Yonhap News Agency.
The Financial Services Commission (FSC) announced Wednesday that the company was able to meet all requirements, becoming the first industry newcomer to be specifically approved for digital insurance operations. Previously, the regulator has only approved established insurance companies like Kyobo Life Insurance and Hanwha General Insurance to offer online insurance services.
Kakao operates a massive internet platform that includes the digital wallet service Kakao Pay and the widely popular instant messaging app KakaoTalk. With about 47 million users nationwide, the company’s entrance into the digital insurance market is expected to spur heavy competition.
According to Maeil Business News, several life and non-life insurance associations have requested that President-elect Yoon Suk-yeol allow insurance companies to add new businesses in more diverse lifestyle and financial service sectors so that they may maintain a competitive edge against digital multi-service platforms like Kakao.
Kakao’s new insurance business is expected to launch in the third quarter of this year, with plans to offer coverage for taxi rides, driver services, and online purchase returns. Kakao Corp will own 40% of the business, while 60% will be owned by Kakao Pay. Both will contribute an initial capital of about US$81 million for the launch, according to Yonhap News Agency.
