Korea-based full-stack digital insurance platform, Carrot General Insurance Corp (Carrot) has achieved a milestone as it becomes the first insurance firm to get the exclusive right to use behavioural-based insurance (BBI) in four years and four months.
Issued by the General Insurance Association of Korea, Carrot will now be the only organisation to use BBI for the next six months. Auto insurance, a compulsory product sold by 12 general insurance companies, is typically standardised with minimal differentiation. Therefore, exclusive rights for auto insurance are rare. Since the early 2020s, only two such rights have been granted, both to Carrot.
Kevin Yang, director of Carrot’s mobility division stated: “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 added: “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.”
The exclusive right is effective for six months from the date of approval. Carrot has been offering the behavioural-based auto insurance product since 24 May.
The next step for Carrot
Carrot offers discounted benefits to all its customers, regardless of their safe driving score in the past. The system calculates monthly safe driving scores and provides reimbursements based on the number of safe driving achievements during the insurance period. The New Product Review Committee of the General Insurance Association of Korea highly praised the originality and progressiveness of Carrot’s new system and service, granting an exclusive right to use it for six months.
Over the past four years, Carrot has accumulated driving data from approximately 1.5 million customers through its Per-mile auto insurance and successfully derived driving scores by analysing 7.4 billion km of driving data. It has been highly rated for motivating safe driving during the insurance period and providing personalised feedback to help customers monitor and improve their driving habits.
Since Carrot launched behavioural-based insurance on 30 May, the accident rate for customers who achieved a safe driving score using Carrot’s BBI auto insurance – defined as a monthly safe driving score of 70 or higher and a monthly minimum driving distance of 100km – was recorded at 12 per cent for the month of June. This rate is notably lower, considering that the average industry accident rate for each June from 2019 to 2023 generally ranges from 15 per cent to 17 per cent.
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