Auto insurance market may plunge in developed countries, study shows
By Jhoo Dong-chan
The auto insurance market in developed countries may decline by 70 percent due to improved technology and alternative transport, a study shows.
According to a Korea Insurance Research Institute (KIRI) study released on Sunday, the car insurance market may decline 40 percent by 2030 and 70 percent by 2040 in developed countries due to car-sharing.
The KIRI said the concept of car-sharing and smart car rent have been increasingly popular since Uber entered the market in 2010. Socar, a car-sharing service provider in Korea, has taken center stage in the changing methods of transport.
Likewise, development of auto technologies is another factor behind the projected decline in the car insurance market in developed countries.
The introduction of various advanced driving assistance systems and self-driving technologies, have significantly reduced the accident rate. Due to the introduction of such technologies, the private auto insurance market is expected to decline to 30 percent by 2040, the study says.
“The car insurance market is shifting from private to corporate,” said an industry insider.
“When self-driving technologies and the car-sharing trend are fully positioned in the market, those who buy insurance will be corporations that develop or invent autonomous driving technologies or companies that provide car-sharing services.”
Founded in 2009, Uber is a San Francisco-based online transportation company in which customers request drivers through an app. Receiving and processing the requests, Uber connects the Uber driver nearest to the customer, sending route information to the drivers. Uber drivers use their own vehicles to provide the service.
Uber tried to launch its operation in Korea in 2015, but failed as the National Assembly passed a bill to ban unregistered drivers from providing taxi services. It launched the UberX app, a service that matches commuters with individuals using their personal cars as taxis, earlier, but had to pull out after facing strong opposition from the taxi industry and local authorities.
Socar is a Korean online transportation company providing a car-sharing service through a smartphone application. It rents their cars to those who apply through the app, and charges by the mileage calculated by the GPS installed in the car.
It provides compact cars such as the Kia Morning through to luxury cars in the BMW 5-Series.