Incheon International Airport Terminal 1 Departure Hall. /News1

Shinhan EZ Insurance and Hana Insurance, among other digital insurers, are competing in the travel insurance market by offering affordable prices and differentiated services. It is interpreted that digital insurers, focusing on non-face-to-face sales, are concentrating on travel insurance products that are easy to sell online during the high season for vacations. Travel insurance has a premium around 10,000 won, which is not highly profitable, but its advantage lies in quickly enhancing brand image and rapidly increasing sales in a short period.

According to the insurance comparison recommendation platform 'Insurance Damoa' on the 24th, out of the 10 cheapest travel insurance products, digital insurers accounted for six of them. The maximum premium for Shinhan EZ Insurance's 'Shinhan SOL First Overseas Travel Insurance' was 8,750 won, making it the lowest priced product currently available. Hana Insurance (10,220 won) was ranked second, Carrot Insurance was fourth (10,490 won), and Kakao Pay Insurance (10,760 won) was fifth.

Digital insurers are also offering differentiated services compared to other insurers' travel insurance. Last month, Shinhan EZ Insurance launched a service that compensates up to 90% for cancellation penalties on air tickets in collaboration with Jeju Air. This service also provides the same level of compensation in cases where travel is inevitably canceled the day before departure, which incurs the highest penalty.

In April, Carrot Insurance introduced a special clause for overseas travel insurance that compensates for delays or cancellations of departing flights. If a flight is delayed by more than two hours or canceled, the product pays out up to 100,000 won (in cases of delays or cancellations of more than six hours) based on the delay time.

Carrot Insurance travel insurance aircraft delay and cancellation compensation standards. /Screenshot from Carrot Insurance website

Kakao Pay Insurance offers a benefit of refunding 10% of the premium for accident-free returns after overseas travel. It is also operating a 'real-time payment' service that pays out insurance money within one minute in the event of a flight delay, the first of its kind in Korea.

Travel insurance falls under the category of simple and low-cost short-term mini-insurance, making it a product suitable for non-face-to-face sales. The demand for travel insurance surges in the second quarter, which is the peak travel season, and its advantage is the ability to build brand awareness and generate revenue in a short period. The data of travel insurance policyholders can also be used for developing other products in the future.

Digital insurers are mostly recording losses, expecting to recover profitability through the expansion of travel insurance sales. Due to the nature of digital insurance companies requiring non-face-to-face sales of insurance products, it is challenging to sell long-term indemnity insurance that has complex terms, despite the potential for high profitability.

An insurance industry official said, 'Digital insurers are putting all their efforts into creating a long-term revenue structure,' and noted, 'While it is difficult to expect significant revenue from travel insurance in the immediate term, it could be a meaningful strategy in the long run for enhancing brand image and providing an incentive to other products.'