[1mmGeumyungTalk] Insurance Comparison Recommendation Service Faces Controversy Over 'Commission' This Time

Discussion Arises Over Reduction of Symbiotic Finance Nominal Fees
Platform Industry Fiercely Opposes Amid Sales Decline Concerns
Some Insurance Companies Also Perplexed... Calculations Become More Complex

Conflicts have arisen over the standardization of the application programming interface (API) format for data exchange in the insurance comparison recommendation service, and now tensions have escalated over the determination of platform brokerage fees. The authorities proposed setting the fees lower than the initially suggested maximum of around 4%, prompting strong opposition from platform companies.

According to industry sources on the 20th, the Financial Services Commission held a meeting the previous day with the General Insurance Association and the Fintech Industry Association regarding the insurance comparison recommendation service to be implemented in January next year. Although the meeting discussed the commission fees that insurers can provide to platform companies, no significant consensus was reached.

Initially, the brokerage fee was expected to be set at around 3-4%, where insurers upload insurance products to platforms, and the platforms provide comparison and recommendation services to customers. The financial authorities limited the fees to not exceed the 4% range to prevent the fees paid to platforms from being directly passed on to insurance premiums. Consequently, insurers and platform companies were negotiating with the 3-4% fee range in mind.

However, the authorities recently proposed lowering the fees, which led to fierce opposition from platform companies. There are reports that discussions even suggested setting the fees in the 2% range. Naturally, platform companies, whose revenue could be halved overnight, rejected this, but the insurance industry believed the authorities’ proposal would be implemented as is and shared the news among insurers. Some insurers even inquired with platform companies whether the 2% fee proposal was true.

The financial authorities’ stance is interpreted as an effort to continue promoting policies for win-win finance and enhancing consumer benefits into early next year. Since each insurer plans to offer around a 2% discount on auto insurance premiums under the banner of mutual growth by the end of the year, if brokerage fees exceed 2%, consumers would find it difficult to feel the actual effect of the premium discounts. Moreover, with the launch of mortgage refinancing services and jeonse (lease deposit) refinancing services scheduled for January next year, the authorities seem to aim to maximize the effect of the 'win-win finance' policy.

Unlike the platform companies that are actively opposing, insurers are taking a wait-and-see approach. They have not directly intervened in the conflict, as a reduction in fees paid to platforms would be beneficial for them. Some insurers are in a difficult position. They had internally planned to set fees at around 4% to avoid losing sales channel control to platforms and intended to upload insurance products to platforms at prices reflecting these fees, but this plan has been disrupted. An insurer official said, "Whether insurers and platform companies will truly accept the 2% fee discussion remains to be seen," adding, "The emergence of such discussions on the surface has actually limited the industry's room for maneuver."

Meanwhile, the Financial Services Commission is drawing a line for now. A commission official stated, "Fees are determined by the market, so the authorities cannot intervene," and added, "While the insurance industry is creating an atmosphere of easing insurance premium burdens, and discussions about appropriate fees from a win-win perspective can take place, we cannot precisely set and impose a specific percentage."