SEOUL, June 7 (Korea Bizwire) – With the Korea Insurance Development Institute due to reveal its reference net premium rates for electric cars by the end of June, industry watchers are speculating that premiums for EVs will be some 10 percent lower than gasoline or diesel-powered vehicles.
The reference premium rate will be based on the institute’s analysis of EV accident statistics and the loss ratio for insurers, to be used by smaller insurance companies that lack the resources to independently derive this type of data.
In an earlier study, conducted on behalf of the Ministry of Trade, Industry & Energy, the KIDI concluded that EVs are in fewer, less severe, traffic accidents due to relatively shorter trip distances, and travel that is limited predominantly to major cities with access to charging facilities, suggesting that insurance rates should fall roughly 10 percent lower than conventional vehicles.
Currently, a handful of insurers, including Hyundai Marine & Fire Insurance, Dongbu Insurance, and Samsung Fire & Marine Insurance, offer EV-specific premiums, most of which are already more affordable than existing car insurance rates.
As of April, South Korea had 14,063 officially registered EVs, accounting for 0.06 percent of all vehicles in the country.
Although the rate is far short of the global EV penetration rate of 3.5 percent, the South Korean market is quickly gaining momentum. Last year, 5,914 electric vehicles were newly-registered, tripling the 2015 figure of 2,907, and six times the 1,075 recorded in 2014.
The Ministry of Environment also pledged to bring up the number of EVs to 250,000 by 2020, making bold investments in building charging facilities across the country, and providing subsidies for EV purchases.
“Automakers are fiercely competing for the EV market amid global environmental policies and the fourth industrial revolution,” said an official from Hyundai Marine & Fire Insurance. “We expect the (South Korean) government’s new policies to dramatically increase the number of EV drivers, subsequently revitalizing the local insurance market.”
By Kevin Lee (email@example.com)