Korea's blooming e-insurance market gets bigger with new foreign player, capital

[Source: LINA Life Insurance]

Digital insurance market is heating up in South Korea, joined by U.S. health service company Cigna while Hanwha General Insurance is bolstering capital in its digital non-life servicing of Carrot General Insurance to go more aggressive.

According to industry sources on Wednesday, Cigna, parent of LINA Life Insurance of Korea, recently approved a plan to set up a digital non-life insurance company in Korea internally possibly as early as next year. The company has already engaged in insurance business in Korea and thus government approval process for the launch is expected to go easy, sources expected.

If Cigna gets the nod for the plan, its digital non-life insurer would be the first of the kind established by a foreign entity in Korea.

Currently two digital insurers operate in Korea – life insurer Kyobo Lifeplanet Life Insurance and non-life insurer Carrot General Insurance. Kakao Pay under the country’s dominant chat platform operator Kakao Corp. was recently granted preliminary approval on its business plan on digital non-life insurance.

Cigna offers insurance and health care services in about 30 countries including the U.S. The latest decision is to test out integration of its health care business into Korea’s fast-growing digital infrastructure.

[Source: Hanwha General Insurance]

Hanwha General Insurance also announced Wednesday it would purchase some of new shares to be issued by Carrot General Insurance to up its stake to 56.6 percent from 51.6 percent, which amounts to 12.32 million shares costing 61.6 billion won.

Carrot General Insurance announced its recapitalization scheme last month to issue 100 billion won worth new shares to its existing shareholders and T Map Mobility, a mobility subsidiary of SK Telecom.

The rights offering will halve the stake of SK Telecom to 10 percent, while increasing T Map Mobility ownership to 5 percent. STIC Investment and Hyundai Motor will retain their ownership at 15 percent and 3.5 percent, respectively.

The latest recapitalization is to bolster Carrot General Insurance’s financial health to achieve its mid- to long-term business strategies and will help raise the enterprise value of both companies, said Hanwha General Insurance.

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