[Asia Economy Reporter Kim Min-young] Viva Republica, the operator of the mobile financial service Toss, announced on the 2nd that it will introduce Carrot General Insurance’s “Per-Mile Car Insurance,” a postpaid auto insurance where premiums are paid monthly based on driving distance, through the Toss application (app).
This postpaid auto insurance available on Toss is an on-demand product designed to meet the needs of users who want to pay mandatory auto insurance premiums only for the distance they actually drive. Upon subscription, the first month’s base fee and insurance premium corresponding to 1,000 km of driving are prepaid, and thereafter, premiums are paid monthly according to the distance driven.
This differs from conventional auto insurance, which is subscribed on an annual basis and where the insurer uniformly sets premiums reflecting the average driving distance of all drivers. By entering their vehicle information in the Toss app, users can check their estimated monthly premium and subscribe through Carrot General Insurance’s simple non-face-to-face procedure. Monthly driving distance is measured by installing Carrot General Insurance’s driving data measurement device, the “Carrot Plug,” in the vehicle at the time of insurance subscription.
Toss stated that it partnered with Carrot General Insurance based on survey results showing that many drivers have relatively short annual driving distances of less than 15,000 km and that these drivers prioritize affordable premiums when subscribing to mandatory auto insurance.
According to a recent survey on auto insurance awareness and demand conducted among approximately 100,000 Toss app users, 54% of respondents drove less than 15,000 km annually, accounting for more than half. Among them, 32% responded that they would “actively consider subscribing” if a monthly postpaid auto insurance based on driving distance were available, and 59% said they would “consider it at least once.” When asked about important factors in choosing auto insurance, respondents cited “accident handling capability (68%)” followed by “affordable premiums (55%).”
Carrot General Insurance estimates that if the annual driving distance is less than 15,000 km, premiums can be reduced by 8-30% compared to existing direct auto insurance. Since premiums are divided and paid monthly, accessibility is improved for consumers who found it burdensome to pay a year’s worth of premiums all at once.
A Toss official said, “This postpaid auto insurance will be useful for consumers who drive only on weekends or have short driving distances but feel burdened by paying premiums similar to those who drive daily,” adding, “Toss will continue to actively offer useful insurance services to customers.”
Since January last year, Toss has partnered with 11 domestic and international insurers to offer 19 types of mini-insurance services such as overseas travel insurance and mobile phone damage insurance, with cumulative subscriptions reaching approximately 160,000 to date.
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