Growing Auto Insurance Platform Channels—Business Share Rises Among Smaller Insurers

(Seoul=Yonhap Infomax) Yun Gu Lee – The platform (PM) channel in South Korea’s auto insurance market continues to expand, with small and mid-sized non-life insurers increasingly leveraging this distribution method.

According to the General Insurance Association of Korea, as of the first half of this year, Lotte Insurance Co. and Heungkuk Fire & Marine Insurance Co. saw their PM channel business ratios rise to 17.7% and 30.5%, up 2.1 percentage points (p) and 11.6p year-on-year, respectively.

AXA General Insurance Co. also recorded a 2.9p increase to 12.4% over the same period.

This contrasts with a decline in the PM channel business share among major insurers. Samsung Fire & Marine Insurance Co. and DB Insurance Co. posted ratios of 9.6% and 6.3%, down 0.4p and 3.5p, while Hyundai Marine & Fire Insurance Co. and KB Insurance Co. saw decreases of 1.7p and 1.3p to 7.4% and 4.2%, respectively.

“The overall scale of the PM channel is steadily growing,” said an industry official. “Given the advantages in linking auto insurance with other products and competitive pricing, the channel offers significant merit for small and mid-sized insurers.”

Data from the Financial Supervisory Service (FSS) show that the PM channel accounted for 0.7% of auto insurance sales in the first half, up 0.4p from a year earlier. While face-to-face and telemarketing (TM) channels remain dominant at 46.4% and 15.7%, both declined by 1.6p and 0.4p, respectively, over the same period.

The launch of “Auto Insurance Comparison & Recommendation Service 2.0” in March is seen as a key driver of PM channel growth. This platform allows users to compare auto insurance premiums across insurers’ online channels (CM) at identical rates.

Fintech firms Naver Pay and Toss were first to introduce the service, which automatically inputs vehicle information and policy expiry dates, enabling users to conveniently and accurately compare premiums without manual entry.

In the first half, 14.5% of users of the Auto Insurance Comparison & Recommendation Service 2.0 proceeded to contract, up 4.8p from the previous version.

According to Naver Pay, cumulative usage of its auto insurance comparison service surpassed 3.5 million cases as of August, just 18 months after launch. Notably, 36% of users switching insurers moved from major to small and mid-sized companies.

“For large insurers, traditional channels still wield significant influence, so it remains to be seen whether the PM channel will become a core distribution method,” an industry source added.

yglee2@yna.co.kr

(End)