Kyobo LifePlanet Life Insurance is preparing to be absorbed by Kyobo Life Insurance, ending a 13-year digital experiment launched in 2013 as South Korea’s first internet-exclusive life insurer.
The Collapse of Digital-Only Life Insurance Models
Kyobo LifePlanet was established to cut sales commissions and allow consumers to buy policies directly online without agents. Despite these cost-saving measures, the company failed to turn a profit in any single year of its operation. Kyobo Life Insurance announced the absorption decision on the 15th, concluding a decade-long push into purely digital life insurance distribution. This follows the closure of another digital venture: Carrot General Insurance, a digital property and casualty insurer launched in 2019 known for its per-mile auto insurance, was absorbed by Hanwa General Insurance in October after posting net losses of 760억원 in 2023 and 662억원의 in 2024.
With these exits, Kakao Pay General Insurance remains the sole standalone digital insurer in the South Korean market. While Kakao Pay General Insurance has yet to achieve profitability, it has shifted its product focus from short-term, low-cost items like travel insurance toward long-term protection products, introducing infant, health, and pet insurance policies alongside an online policy analysis tool called “Find the Gaps in My Insurance.”
Consumer Preference for Face-to-Face Sales
Digital insurance providers struggled because online marketing failed to gain traction for core insurance products. Kyobo LifePlanet’s internal reports projected that cyber marketing (CM) sales for protection-type products would reach 11.3% by 2022. By that year, actual CM sales accounted for just 0.2%. Similarly, projected monthly initial premiums for digital products were forecasted at 773억원 for 2022, but actual performance stalled at 12억원.
This sluggish uptake contrasts sharply with other financial sectors in South Korea. Digital sales penetration for bank credit loans climbed from 29% in 2019 to 78% last year, digital stock account openings rose from under 10% in 2016 to 89%, and credit card issuances shifted from 13% in 2017 to 55%. By contrast, life insurance uptake via digital channels crawled from 0.1% in 2022 to 0.2% last year.
Industry analysts attribute this gap to the structural complexity of life and health policies. While consumers readily compare prices online for standardized items like auto insurance, products such as whole-life or comprehensive health policies feature intricate coverage structures and complex terminology that require professional explanation. Traditional face-to-face sales channels continue to dominate because buyers rely heavily on personal networks and human agents to understand policy terms.
Strong Performance Among Top Human Agents
While digital-only insurers struggled, traditional face-to-face channels thrived. At the 10th Golden Fellow certification ceremony hosted by the Korea Life Insurance Association at Seoul’s Shilla Hotel, the organization recognized 1,000 top-performing agents representing the top 0.83% of the country’s 12만813 registered life insurance agents. Average earnings for these elite agents jumped 62% from 1억6643만원 in 2023 to 2억7056만원, with a 98.4% customer retention rate after one year and zero incomplete sales.
Korea Life Insurance Association Chairman Kim Chul-joo noted at the event that human agents remain essential because understanding a client’s life and standing by them requires a personal touch, regardless of how advanced digital technology becomes.
Regulatory Constraints and Operational Pivots
South Korean insurance regulations compound the challenges for online-only entities. Under insurance business laws, digital insurers must recruit at least 90% of their total contracts through telephone, mail, or computer networks. Without physical branches or face-to-face channels, these firms find it difficult to market complex long-term policies, forcing heavy reliance on simpler short-term offerings.
Despite retreating from direct online sales of complex products, traditional and digital insurers alike are expanding their technological integration in back-end operations. Insurance companies now utilize artificial intelligence to automate policy underwriting, scan medical history, review claims data, and evaluate risk factors. Routine contracts are processed via automated systems, while high-risk or conditional cases are routed to specialized human underwriters.
Insurers are also investing in digital healthcare platforms as an emerging strategic driver. Lotte Insurance partnered with Kakao Healthcare to build integrated chronic disease management systems, while Samsung Fire & Marine Insurance collaborated with wearable AI monitoring firms to develop a comprehensive aftercare platform connecting disease prevention, treatment, and post-discharge recovery. Industry stakeholders report that health data gathered through these platforms assists in product design and loss-ratio management.
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