Korean Reinsurance : · Korea’s ‘mileage’ auto insurance...

The take-up of mileage-based auto insurance, a policy that gives low-mileage drivers discounts on premiums, in Korea turns out to have tripled during a four-year period.

In particular, those who bought the policy were mostly old-age, female or compact car drivers.

According to the Korea Insurance Development Institute, the number of individual auto insurance buyers in Korea was 15.24 million at the end of 2016, of which 5.53 million drivers purchased a policy with conditions on low-mileage premiums discount attached, accounting for 36.3% of the total. This figure is almost three times higher than 11.4% at the end of 2012 when the discount program was introduced in the country.

In respect of sales channel, the portion of drivers who joined the program online was the largest or 55.4%. By demographics, the take-up rate was the highest or 43.4% among people ages 70 or older, followed by those in their 30s, 60s, 40s and 50s. This result reflects the fact that people in their 50s drive longer distances than in their 30s or 40s as they share their car with their grownup children, but at ages 60 or older they start driving less and less due to retirement. By gender, female drivers accounted for 38.5%, slightly outnumbering their male counterparts. Moreover, the smaller the vehicle size was, the more drivers purchased the mileage-based auto insurance.