Hanwha, SKT, Hyundai team up on insuranceSK Telecom, Korea’s top mobile carrier, and Hyundai Motor will jointly enter the insurance business, partnering with Hanwha General Insurance to bring their technology expertise to the industry.
The Financial Services Commission (FSC), the country’s top financial regulator, said Wednesday it has given preliminary permission for SK Telecom, Hyundai Motor and Hanwha General Insurance to build an online insurance company that primarily deals with miscellaneous non-life insurance on digital platforms.
“If the process goes smoothly, it can open in the fourth quarter of this year,” said a spokesperson at SK Telecom.
In six months, the investing units are required to raise the promised capital, complete recruiting and have the physical operation in place, after which it will file for final approval.
The companies said the unit will focus on cars, pets and travel.
Hyundai Motor said the insurer will develop a product that differentiates insurance fees depending on a policy holders’ mileage and other driving behavior. Also on the cards is a system that discounts fees when subscribers are found to drive in a safe manner by adopting a real-time analytical technique to monitor driving habits.
The insurance firm aims to carve out its own niche with lower fees and relatively short contracts.
“We want to offer attractive alternatives for consumers who found existing insurance products expensive and requiring long-term commitment,” said Jang Yoo-seong, head of the artificial intelligence (AI) and mobility division at SK Telecom.
The idea is based on InsurTech, a combination of insurance and technology that has quickly risen to prominence in the global financial industry.
According to a study by the Korea Insurance Research Institute, the market has been rapidly growing in recently years. Investment in InsurTech start-ups, which amounted to $2.6 million in 2013, surged to $11.9 billion in 2017.
The global InsurTech market revenue is valued at $532.7 million in 2018 and is expected to reach $1,119.8 million by 2023, according to Research and Markets, a U.S. market tracker.
Hanwha General Insurance will raise 75.1 percent of the capital while SK Telecom puts in 9.9 percent. Hyundai Motor invested 5.1 percent and Altos Ventures Korea, an investment firm, 9.9 percent.
In total, the companies will funnel in a total of 85 billion won.
If passed, the new insurer will be the country’s second internet-only insurance company after Kyobo Life Planet.
BY PARK EUN-JEE [firstname.lastname@example.org]