One in Three Auto Insurance Policies Are Purchased Online

At the beginning of the service back in 2003, the online market share was only 5.1 percent, but it has increased consistently ever since to over 10 percent in 2005, to over 20 percent in 2012 and 30 percent in 2012.(image:KobizMedia/KoreaBizwire)

SEOUL, June 2 (Korea Bizwire) – Buying of auto insurance policies online is increasing exponentially in Korea.On May 29, according to the Korea Insurance Development Institute, the premium income of online auto insurance services was 3,418.3 billion won in 2013, accounting for 29.2 percent of the total auto insurance premium income. This is a 2.2 percentage point increase from the previous year.

In 2013, the online market share of personal-use auto insurance increased 2.6 percentage points to 36.0 percent, which was a record high. At the beginning of the service back in 2003, the online market share was only 5.1 percent, but it has increased consistently ever since to over 10 percent in 2005, to over 20 percent in 2012 and 30 percent in 2012.

The reason for the popularity of online auto insurance is that it is cheaper than offline plans by up to 20 percent because there are no additional costs like commissions and other over heads.

Online service also makes it easy for consumers to compare the prices and premiums and find the cheapest plans. Therefore, consumers in need of new auto insurance plans or renewal of their existing plans tend to search for the plans online instead of seeing insurance agents in person.

Online financial products in general offer greater benefits including easy access, favorable interest rates, commission exemption and optional services. Considering the world’s highest Internet uptake rate and Internet savviness of the public, online auto insurances are likely to become even more popular.

However, there are a few precautions upon getting an auto insurance quote online. One of the important things to be aware of is that a plan may cost differently depending on the insurer. Reportedly, the differences in insurance premiums are as high as 35 percent and the insurance companies keep on adjusting the premiums.

Written by Robin Koo (linguistkoo@koreabizwire.com)

Business (Follow us @Biznews_Korea)