Kakao Pay Insurance in South Korea boosts premiums and cuts losses — Korea Herald

In South Korea, digital insurer Kakao Pay Insurance increased gross written premiums in the second quarter to 25.6 billion won, or $18.9 million, from 12.5 billion won a year earlier. At the same time, its net loss for the first half of the year narrowed to 17.5 billion won from 24.8 billion won in the same period last year, reports Korea Herald.

The company’s insurance services are available through KakaoTalk and Kakao Pay without a separate insurance app. According to Kakao Pay, around 7 million people use its service on average each day. Kakao Pay Insurance was launched in 2022 as the insurance business of a digital financial platform with an already established audience.

Growth in premiums and sales

Kakao Pay Insurance’s insurance revenue in the first half of the year rose 82.6% year-on-year to a record 44 billion won. Premium volume under long-term contracts reached 4.5 billion won over six months, exceeding the 4.4 billion won recorded during the whole previous year.

One of the company’s first key products was travel insurance, with the number of policies purchased exceeding 7 million. Kakao Pay Insurance subsequently added insurance for mobile phones, infants, school-age children, health and pets. The products are designed for self-service purchase without an intermediary; the company has no insurance agents and does not pay traditional agent commissions.

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Betting on the platform

Kakao Pay said the improved financial result was due to the completion of a significant share of initial investments in systems and infrastructure. Spending on personnel, marketing and other operational needs has entered a more stable phase, according to the company’s assessment.

Despite narrowing losses, Kakao Pay Insurance has not yet become profitable. During a second-quarter earnings conference, Kakao Pay Chief Operating Officer Han Sun-uk said that lower loss ratios, the completion of amortization of initial investments and cost control should soon allow the company to assess more accurately the timeline for reaching break-even.

Unlike Kakao Pay Insurance, early standalone digital insurers in the country are returning under the control of traditional insurance groups: Kyobo Lifeplanet is due to be absorbed by its parent company Kyobo Life in April 2027, while Carrot General Insurance was absorbed by Hanwha General Insurance last year.