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| Korean insurers are increasingly setting up joint ventures with Chinese entities to tap into the market for online insurance products there. gettyimagesbank |
By Kim Bo-eun
Korean insurers are on track to capture opportunities in China's fast-growing online market for insurance products.
Samsung Fire & Marine Insurance last week secured approval from Chinese authorities to set up a joint venture with local entities including China's bigtech company Tencent.
Accordingly, the Samsung affiliate's subsidiary in China will be converted into a joint venture, under which the insurer will own 37 percent of shares and Tencent 32 percent. The remaining shares will be held by a number of Chinese investors.
Samsung's non-life insurer plans to offer its products utilizing Tencent's platform, which millennials and Gen Z consumers access on a daily basis.
The Samsung insurance affiliate is not the first among Korean players in the same industry to set up a joint entity with local companies in China.
Hyundai Marine & Fire Insurance set up a joint venture on the mainland in April 2020, with Chinese investment holding company Legend Holdings and the country's ride-hailing app Didi Chuxing.
Korean insurers have begun to expand their operations amid the rapid growth of China's online insurance market, which came with the entry of bigtechs such as Alibaba and Tencent into the market in 2012, and the emergence of online insurers such as ZhongAn in 2013, as they moved to cater to the preferences of those born in the 1980s and 1990s.
The size of the market for online insurance products was estimated at 269.5 billion yuan ($39.7 billion) as of 2019, up 8.4 times from the market size of 2013, according to a report issued by KB Financial Group's management research institute last year.
Insurance products available through online channels accounted for about 6 to 7.2 percent of the entire insurance market in 2019, and the percentage has continued to grow.
Such products are either managed by local insurers or a third party, with the latter model becoming mainstream.
A survey by reinsurer Swiss Re with 3,000 Chinese participants from December 2019 to February 2020 showed 60.8 percent wanted easy-to-sign-up-for and affordable health insurance products that they could apply for online.
