South Korea's first digital insurer seven-year-old Carrot General Insurance is set to be absorbed into its parent company Hanwha General Insurance after posting net losses for six consecutive years. Carrot General Insurance was established in 2019.
According to press reports Hanwha Insurance in a board meeting held on 2 May 2025 announced its decision to merge its subsidiary digital Carrot General Insurance.
Media reports quote company officials saying, "Carrot Insurance is expected to remain an independent business unit even after the merger in the sense of continuing the digital innovation that Carrot was promoting."
Carrot Insurance recorded a net loss of KRW9.1bn in the first year of its operation. Carrot posted net losses for six consecutive years. Its annual loss peaked at KRW84bn in 2022, before narrowing slightly to KRW66.2bn in 2024. The accumulated loss is estimated to be around KRW330bn.
Carrot’s capital adequacy ratio also plunged drastically over the years from 656% in 2022 to 156% in 2024, barely above the 150% threshold recommended by local regulators.
Hanwha General Insurance was the largest shareholder with a 75.1% stake, followed by SK Telecom (9.9%), Altos Fund (9.9%) and Hyundai Motor (5.1%) to begin with. Hanwha Insurance has reportedly invested nearly KRW500bn directly or indirectly over the past six years.
Hanwha had established Carrot at a time when more players were moving into online insurance distribution. In 2019 an increasing number of FinTech firms were seeking entry into the Korean insurance market, aiming to attract customers to their online platforms.
Carrot gained prominence due to its signature pay-per-mile auto insurance. In this cover the premiums are calculated based on actual driving distance. The conventional plans require full annual payments regardless of usage.
Industry watchers say, however, Carrot failed to break through in the broader insurance market due to its digital-only model. The local insurance sector is still dominated by traditional firms that rely heavily on in-person sales. Digital products like auto insurance are typically short-term, low-premium products with thin margins.
However, the industry sources as quoted in the media reports have said that Carrot’s merger cannot be termed as a complete failure. They said that demand is rising gradually but surely and as technology evolves digital channels will make a mark in long-term insurance products as well.