[Exclusive] Driving Habit Data Platform Launches in March... Encourages Safe Driving for Insurance Discounts

Full-scale Shift Away from T-map and Kakao Navi: Insurers Secure Proprietary Driving Habit Data
First Products to Launch in Q3?Q4
Expansion of Usage-Based Insurance (UBI) and Laying the Groundwork for Behavior-Based Insurance (BBI)

The 'Driving Habit Data Platform,' jointly developed since last year by the Korea Insurance Development Institute and seven non-life insurance companies selling auto insurance, is set to complete development in March and begin full-scale data accumulation. This lays the foundation for the domestic auto insurance market to advance from Usage-Based Insurance (UBI) to Behavior-Based Insurance (BBI). Insurance companies plan to use the platform to encourage safe driving among the public and introduce insurance products offering premium discounts within the year.

According to a comprehensive report by Asia Economy on the 19th, the Korea Insurance Development Institute has completed the development of the driving habit data platform and is currently conducting final tests for integration into each insurer's application. The institute and the auto insurance industry have been planning and developing the platform since early last year with the aim of aggregating driving habit information that reflects individual drivers' accident risks to enhance consumer benefits. A senior insurance industry official stated, "Once the Korea Insurance Development Institute launches the platform around March, each insurer plans to introduce driving habit data services to customers through their apps by May or June after legal reviews. After about three months of data accumulation, the institute will develop a safe driving score calculation model, and related products are expected to be released in the third or fourth quarter of this year."

Currently, the auto insurance industry sells UBI products based on driving habits as optional riders. However, except for Carrot General Insurance, which provides its own Internet of Things (IoT) devices, most companies link data from fintech providers such as T-map, Kakao Navi, and Naver Map. Some also utilize connected car data from automobile manufacturers. However, these methods are costly and have limitations in securing high-quality data for developing personalized insurance and managing loss ratios.

Internationally, the UBI market is more advanced than in Korea. Leading U.S. insurers such as Progressive, Allstate, Liberty Mutual, and Nationwide actively sell UBI products. They use various data collection methods, including smartphone apps, black boxes, and On-Board Diagnostics (OBD) devices. The UBI subscription rate is also high in the UK and Italy. At a New Year's press conference held on the 5th, Heo Chang-eon, president of the Korea Insurance Development Institute, said, "The global UBI market size is expected to grow from about $32 billion in 2023 to $299 billion (approximately 433 trillion KRW) by 2033," adding, "As UBI expands, positive effects such as more cautious driving and fewer accidents are expected."

The platform developed by the Korea Insurance Development Institute includes features such as vehicle information registration and occupancy verification via Bluetooth connection, driving habit data generation and transmission, and provision of driving scores. Driving habit data collected include sudden acceleration, sudden deceleration, sudden stops, sharp turns, sudden U-turns, driving time, and late-night driving hours. The institute plans to analyze accident risk using this data and develop a safe driving score calculation model. This model will be used by insurers to create products with differentiated premiums based on scores.

With the release of UBI products based on insurers' own data within the year, the introduction of BBI is also expected to accelerate alongside UBI expansion. BBI is an auto insurance product that measures driving behavior information more precisely than UBI and reflects it in premiums. It collects not only simple data such as acceleration and deceleration but also the driver's smartphone usage frequency and cornering tilt using artificial intelligence (AI) and other technologies. Globally, automotive companies like Tesla, GM, and Ford sell BBI products. In Korea, it is still in the early stages due to privacy concerns. An insurance industry official said, "As customers develop safe driving habits through UBI and experience premium discounts, resistance to BBI will significantly decrease," adding, "Insurers will be able to offer personalized products specialized in individual driving behavior rather than just age, accident history, or driving experience."