South Korean insurtech Carrot General Insurance Corporation (Carrot) has secured exclusive rights for the use of behavioural-based insurance (BBI) from the General Insurance Association of Korea.
This right is granted for six months and represents a notable event in the auto insurance market.
Carrot said the award of these rights is significant as it is the first time in more than four years that such exclusivity has been granted in the auto insurance sector.
Auto insurance in South Korea is a compulsory offering from 12 general insurance companies, typically featuring minimal differentiation. Consequently, exclusive rights in this category are rare.
Since the early 2020s, Carrot has been the only company to receive such rights, having done so twice.
Carrot noted that its system offers discounts to all customers, regardless of their historical safe driving scores. This system calculates a monthly safe driving score and provides reimbursements based on the number of safe driving achievements over the insurance term.
The General Insurance Association of Korea’s New Product Review Committee acknowledged the system’s originality, granting Carrot the exclusive rights for its use.
In the past four years, Carrot has collected driving data from around 1.5 million customers through its per-mile auto insurance product. The company has analysed 7.4 billion kilometres of driving data, which has been instrumental in promoting safe driving and offering personalised feedback to help customers improve their driving habits.
Since the introduction of Carrot’s BBI on May 30, the accident rate among customers who achieved a monthly safe driving score of 70 or higher and a minimum driving distance of 100 kilometres was recorded at 12% for June.
The insurtech said the rate is below the industry average accident rate for the same month, which typically ranges from 15% to 17%.
Kevin Yang, director of Carrot’s mobility division, said the acquisition of exclusive rights to use BBI highlights the efforts of the company’s executives and employees.
“We believe that the acquisition of the exclusive right to use is the result of the efforts of all executives and employees to realise the value and vision that Carrot pursues,” he said. “We will continue to work hard to create more innovation in the insurance industry in line with Carrot’s founding purpose of expanding insurance choices and benefits for customers.”
In other news from South Korea, insurance companies are expected to maintain stable earnings in the near future, thanks to their protection-type long-term products.
