[Financial Insider] "Lotte Sonbo, Signals 'Cancer Insurance House' with 88 Cancer Insurance"

Hong Seonghun Janggi General Manager
Leading the Industry's First '88 Cancer Insurance' Covering Metastatic Cancer

Editor's NoteFinance simply means 'to facilitate the flow of money.' Although it sounds straightforward, it involves complex tasks and the expertise and efforts of many professionals. We take a look at the hidden workers who support and drive large corporations.

Seonghun Hong, Executive Vice President, Long-Term Division, Lotte Insurance

"The '88 Cancer Insurance' will be a signal for Lotte Insurance to relaunch as a specialist in cancer insurance."

Hong Seong-hoon, Executive Vice President and Head of Long-term Insurance at Lotte Insurance, recently emphasized this in an interview with Asia Economy. This confidence is based on the solid performance of the 'let:smile Comprehensive Cancer Insurance (88)', commonly known as '88 Cancer Insurance', which was launched in early June. Since its release in early June, the 88 Cancer Insurance has achieved sales of 3.2 billion KRW based on new contracts as of the 17th. This translates to about 500 contracts per business day and over 10,000 contracts sold monthly. It is the highest level of cancer insurance performance within the non-life insurance industry.

The long-term insurance market, especially cancer insurance products with a subscription period of over three years, is already saturated, but they found a target area within it: 'metastatic cancer.' Hong explained, "Consumers are anxious not only about the initial cancer diagnosis but also about the occurrence of additional cancers, yet there were no products that covered this. To address this, we divided cancer into eight categories and created a product that covers not only the initial cancer but also metastatic cancers."

Although demand was confirmed, developing the product was not easy. Since it was a product that had never existed before, they had to build reference data from scratch. Hong said, "Because there was no precedent for coverage of metastatic cancer, we had to secure data from various hospitals and health insurance records, then distinguish and refine data between the initial cancer and subsequent metastatic cancers, which required a great deal of effort. We also put significant effort into making the coverage details easy for customers to understand."

In fact, the 88 Cancer Insurance is the industry's first to provide coverage up to eight times according to eight different primary and metastatic cancer sites. It is recognized for eliminating blind spots in metastatic cancer coverage. Due to its creativity, it was granted exclusive usage rights until October. Exclusive usage rights are a kind of patent system in the insurance industry that grants a company exclusive sales rights for a certain period for developing innovative insurance services (products).

They have also prepared a strategy for after the exclusivity period ends. They plan to continue differentiation with the 'Simple 335 Cancer Insurance (88)', which allows even those with pre-existing conditions to easily subscribe with just one question. Hong explained, "While many metastatic cancer-related products are expected to flood the market, no one will be able to replicate the data and experience we have accumulated regarding metastatic cancer."

Hong foresees that the 88 Cancer Insurance will not just be a 'hit product' but will symbolize Lotte Insurance's relaunch. Since being acquired by the private equity fund JKL Partners in 2019, Lotte Insurance has moved beyond strengthening its fundamentals to securing a new identity as a premier cancer insurance specialist. In fact, Lotte Insurance recorded a net profit of 113 billion KRW in the first half of this year. In the first quarter, operating profit surpassed 100 billion KRW, achieving record-high performance. They have also established their own management indicator, New Contract Margin (NCM), to adapt to the new accounting standard IFRS17.

Hong stated, "Although we have had popular products before, the 88 Cancer Insurance will lay the foundation for Lotte Insurance to start as a 'cancer insurance specialist.' We will not merely develop new coverage but create a comprehensive coverage story that addresses the entire process from risk occurrence to resolution, thereby solidifying our position in the cancer insurance market."