Insurance Development Institute Analysis... Special Policy Information Reflected Even After Switching Insurers
Last year, the average insurance premium for individual auto insurance policyholders was 692,000 won, a decrease of 3.6% compared to the previous year. Policyholders who subscribed to mileage-based special policies received an average refund of about 130,000 won.
On the afternoon of January 24, just before the Lunar New Year holiday, the Seoul urban section of the Gyeongbu Expressway near Jamwon Interchange in Seocho-gu, Seoul, was congested with vehicles heading home for the holidays and Friday evening commuters. Photo by Yonhap News
On April 20, the Korea Insurance Development Institute released an analysis of the size and main characteristics of individual auto insurance premiums collected last year.
The number of individual auto insurance policies reached 18.82 million last year, up 1.7% from the previous year, but the total premium income decreased by 1.9% to 13.0185 trillion won. The number of imported cars reached 2.92 million, an increase of 4.3% from the previous year, and the number of electric vehicles reached 370,000, up 36%. The average premium per vehicle was 692,000 won.
The Korea Insurance Development Institute analyzed that the decrease in premium income and average premiums last year was due to an increase in subscriptions to advanced safety device discounts, mileage-based special policies, and online channels (CM).
The installation rate of advanced safety devices was 41%. This rate increased from 29.4% in 2022, to 35.2% in 2023, and to 41% last year. The maximum discount rate for insurance premiums through special policies was about 13%.
The total amount refunded through mileage-based special policies was 1.3509 trillion won, a 6.9% increase from the previous year (1.2641 trillion won). The average refund per person was about 130,000 won. Seven out of ten policyholders with mileage-based special policies received a refund on their premiums. The shorter the driving distance, the greater the refund provided by the mileage-based policy.
The proportion of customers subscribing through the CM channel was 49.5%. The share of CM channel subscriptions increased from 44.1% in 2022, to 47% in 2023, and to 49.5% last year. The Korea Insurance Development Institute explained that premiums through the CM channel are on average about 18% cheaper than those through face-to-face channels.
The Korea Insurance Development Institute advised that policyholders can receive premium discounts for each special policy even if they do not know the details of their vehicle's advanced safety devices. This information can be checked on the car manufacturer's website, among other sources.
For mileage-based special policies, if policyholders submit their mileage information to their current insurer, they can receive the corresponding premium refund even if they later switch to a different insurer.
Heo Changun, president of the Korea Insurance Development Institute, stated, "We will support the development of various products to help reduce the burden of insurance premiums," and added, "We will strive to improve convenience through data utilization and digital innovation."
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