Skip to content
  • KOSPI 3133.64 +8.40 +0.27%
  • KOSDAQ 1034.82 -2.21 -0.21%
  • KOSPI200 410.97 +1.13 +0.28%
  • USD/KRW 1175.3 -6.40 -0.54%
  • JPY100/KRW 1,060.79 -10.66 -1.00%
  • EUR/KRW 1,377.45 -10.10 -0.73%
  • CNH/KRW 181.89 -0.30 -0.16%
View Market Snapshot

Insurance

Cigna seeks to enter Korea's digital non-life insurance market

The US insurer sets its sight on health insurance

By Jun 23, 2021 (Gmt+09:00)

(Getty Images Bank)
(Getty Images Bank)

The US insurance group Cigna looks set to become the first foreign insurer on South Korea's digital non-life insurance platform, with an aim to crack open the saturated market with various healthcare coverage.

Last month, Cigna finalized its plan to launch a wholly-owned digital non-life insurance arm in Korea. To do so, it will apply for a preliminary license sooner rather than later, according to regulatory and insurance industry sources on June 22.

In South Korea, it has been already running LINA Life Insurance Co., its 100%-owned subsidiary, since 1987. That was also the first foreign-owned life insurer in the country.

"We have continued to post decent profits even in the saturated life insurance market. Likewise, we will find an opportunity in the non-life insurance sector," said a LINA Life official.

The decision to expand into Korea's non-life insurance segment was also driven by the lowered entry barriers and the government's move to make public and share medical data accumulated by state-run medical insurance-related agencies and the government's disease control center, he added.

Cigna seeks to enter Korea's digital non-life insurance market

Financial authorities welcome Cigna's planned entrance into the digital insurance segment.

"Cigna Group is the most competitive health insurance provider in the US," said a regulatory official. "We will look forward to their new health insurance products that have not been available here, taking advantage of its global network and big data."

It takes about three months to receive a preliminary license after an application is filed. Upon winning approval, the company needs to complete capital raising within the next six months. 

"Considering that it typically takes a couple of months to win final approval after capital raising is completed, it will be able to launch in the first half of next year," said one of the sources, in reference to Cigna's digital non-life platform in Korea.

Earlier this month, Kakao Pay, a fintech arm of the mobile platform Kakao Corp., was granted preliminary approval to enter the digital insurance market. It is expected to launch in the second half of this year.

Kakao is expected to offer a broad range of affordable insurance products by making full use of its messenger and mobility service apps, as well as the online portal Daum.

Up to now, the country's digital non-life insurance platform has been led by the units of established domestic insurers such as Hana Financial Group and Hanwha Group.

"With the rise of one-person households coupled with the COVID-19 pandemic, one-point digital insurance products are increasingly appealing to young people," said an insurance industry source. "The market will be reinvigorated by various types of new insurance coverage like digital healthcare services."

Cigna's expansionary move in South Korea contrasted with another US insurer, Prudential Financial Inc. Last year, Prudential sold its Korean insurance arm to KB Financial Group for about 2.3 trillion won.

In August of last year, LINA Life said that its parent group’s possible exit from Korea was being talked about by some investment banks, but it has not seen any specific action being taken by Cigna for a possible sale. Since then, no progress has been made in that regard.

LINA Life was ranked third in terms of net profit in South Korea's life insurance market, despite its small asset size of 5 trillion won ($4.4 billion) relative to its domestic rivals.

It has been luring customers with different types of insurance such as elderly-focused and dental treatment coverage from its competitors' while using home shopping channels and telemarketing to sell them. 

Write to Soram Jung and Nan-sae Bin at ram@hankyung.com

Yeonhee Kim edited this article.

Comment 0

0/300