Insurance Companies Face Fierce Competition for 'Exclusive Usage Rights'... "Applications Nearly Reached Last Year's Total" (Comprehensive)

With 18 Applications in the First Half
Close to Last Year's 22 Cases
Annual Record High Expected

Targeting Sales and Marketing Advantages
in a Saturated Insurance Market
Exclusive Use Rights Applications Underway

[Asia Economy Reporter Ki Ha-young] This year, competition to obtain exclusive usage rights, a type of patent right, has intensified in the insurance industry. In the first half of the year alone, the number of applications nearly reached last year's level, and the annual number of applications and acquisitions is expected to hit an all-time high.

According to the industry on the 7th, the New Product Review Committee of the General Insurance Association recently granted exclusive usage rights for three months each (June 3 to September 2) to Hyundai Marine & Fire Insurance, KB Insurance, and Hana Insurance for insurance products for which they applied for exclusive usage rights.

Exclusive usage rights are a kind of patent system for insurance products. The New Product Review Committee of the Life and Non-life Insurance Associations grants insurance companies that develop creative insurance products for consumers exclusive rights to sell the products for a certain period. Typically, exclusivity periods of 3 to 9 months are given after evaluating originality, progressiveness, and usefulness.

Hyundai Marine & Fire Insurance obtained exclusive usage rights by developing the industry's first coverage for fetal birth risks (birth within 31 weeks) and specific high-risk maternal diseases including placenta previa in its 'Good & Good Comprehensive Child Insurance.' KB Insurance received exclusive rights for the '(Non) Fluoride Application Treatment Cost (limited to once per year)' coverage supporting fluoride application costs for cavity prevention, and Hana Insurance was granted exclusive rights for child abuse (excluding relatives) coverage, sequelae disability, and civil lawsuit attorney fees coverage in its 'Hana Wise Child Life Insurance.'

Exclusive Usage Rights Provide Advantages in Sales and Marketing... Applications Expected to Continue

So far this year, insurance companies have applied for a total of 18 exclusive usage rights, approaching last year's 22 applications. Among life insurers, four companies?Mirae Asset, Hanwha, Samsung, and Tongyang Life?applied for a total of 5 exclusive usage rights and were granted all 5. Among non-life insurers, eight companies?KB, Hanwha, MG, DB, Hana Insurance, Meritz, Samsung Fire & Marine Insurance, and Hyundai Marine & Fire Insurance?applied for 13 exclusive usage rights and obtained 10. Non-life insurers, which handle a wider variety of products than life insurers who mainly deal with personal insurance products, are more active in applying for exclusive usage rights. The number of applications has been increasing, with 20 in 2019 and 22 in 2020.

The first product to obtain exclusive usage rights this year was KB Insurance's new risk coverage, 'Thyroid Cancer Hormone Drug Authorized Treatment Cost.' This coverage pays insurance benefits once during the insurance period if diagnosed with thyroid cancer and receiving authorized thyroid hormone drug treatment after thyroid cancer surgery. It was granted exclusive usage rights for three months. Recently, with the distribution of COVID-19 vaccines, Samsung Fire & Marine Insurance's special contract 'Emergency Medical Anaphylaxis Diagnosis Fee,' which received three months of exclusive usage rights, has attracted attention. This coverage pays 2 million KRW once per year upon anaphylaxis diagnosis at an emergency room visit. Other insurers are preparing to launch anaphylaxis coverage insurance starting in July, when Samsung Fire & Marine Insurance's exclusive usage rights expire.

The insurance industry is focusing on obtaining exclusive usage rights more for sales and marketing advantages than for exclusive product sales. Entering a low-interest, low-growth phase and facing fierce product competition, companies can gain an edge in the saturated insurance market by leveraging the 'first' image through exclusive usage rights.

An industry official said, "As product competition intensifies, companies are applying for exclusive usage rights to develop new products and utilize them in sales and marketing," and predicted, "This trend will continue in the future."