Laying the Foundation for UBI Insurance Product Development
Offering Customized Insurance Services and Discounts
The Korea Insurance Development Institute announced on November 27 that it has jointly developed a "driving habits mobile application" with seven non-life insurance companies to promote a culture of safe driving and provide consumers with more customized insurance services. The related services will be introduced sequentially.
As automobile insurance products that reflect driving habits-such as safe driving score discount special contracts-have become more widespread, insurance companies are increasingly required to manage drivers' driving habit data. The market size for usage-based insurance (UBI) has grown from 863,000 people in 2020 to 4,507,000 last year, recording an average annual growth rate of 51.2%.
Until now, insurance companies have purchased driving habit data from map applications (navigation) or automobile manufacturers for product development. However, with the launch of this new app, the insurance industry now has a way to directly generate driving habit data. This is expected to improve data quality and reliability, strengthen personal information protection, and support the development of new products tailored to customer characteristics.
The Korea Insurance Development Institute, together with seven non-life insurance companies-Meritz Fire & Marine Insurance, Hanwha General Insurance, Lotte Insurance, Heungkuk Fire & Marine Insurance, KB Insurance, AXA General Insurance, and Hana Insurance-has developed a mobile app to measure driving habit information, which each insurer will integrate into its own app. Policyholders can easily connect and register their vehicles with their insurer's mobile app via Bluetooth and check their driving characteristics information. Starting this month, participating insurers will sequentially provide the driving habits mobile app service through their own mobile apps. The driving habit data accumulated through the app will be analyzed to establish a reasonable safe driving score calculation method, and insurers will directly calculate customers' safe driving scores to use in determining and discounting insurance premiums.
Heo Chang-eon, President of the Korea Insurance Development Institute, stated, "Building a standardized driving habit data analysis platform is an important step toward improving consumer convenience and insurer efficiency in the evolving mobility environment. We will continue our efforts to develop sophisticated and differentiated innovative products based on driving habits, so that all drivers can benefit from real safety and advantages."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
