Instant messaging app Kakao has called off its plans to form a joint digital insurance venture with Samsung Fire & Marine (SFMI) as they failed to resolve their business differences.

According to a report by Pulse News, the companies on Tuesday informed the Financial Services Commission (FSC) that they have cancelled plans to form a joint online insurance company.

Both companies entered into a strategic partnership in October last year to launch a new digital insurance company in South Korea.

As per the initial agreement, Kakao’s online payment service unit Kakao Pay was to hold management rights, with Kakao and SFMI as strategic investors.

Kakao Pay was to own 50% of the joint venture, while Kakao would have held a 30% stake and SFMI the remaining 20% stake.

The plan, according to the report, was dropped reportedly due to a conflict over the launch of digital car insurance.

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By GlobalData

The report suggested that Samsung Fire & Marine wanted to delay the offering, fearing cannibalization with its own online auto insurance service.

The company was also apprehensive about business prospects due to the reduced auto use amid the Covid-19 pandemic.

The companies have parted on friendly terms, signing an agreement to a general partnership, the report added.

Kakao Pay launched its own simplified insurance services last year. The messaging platform forayed into banking sector in 2017 by launching digital-only lender, Kakao Bank.