[Ecosystem] Insurance Ecosystem for Vehicles: Driving towards the future
Feb 22, 2024 | SEOUL
DRIMAES product mentioned within this articles are offered by DRIMAES, Inc.
The automotive industry is rapidly evolving, and with it, the vehicle insurance ecosystem is undergoing significant changes. The rise of electric vehicles, advancements in Software-Defined Vehicle (SDV) technology, and the proliferation of Internet of Things (IoT) devices are redefining vehicle insurance products and services in various forms.
In this post, we explore the impact of these changes on the vehicle insurance ecosystem and the opportunities and challenges they present to various stakeholders, including consumers, insurance companies, and service providers.
Key Components of the Vehicle Insurance Ecosystem
Fundamentally, the vehicle insurance ecosystem comprises a system that delivers more efficient and personalized insurance products through the combination of various players and innovative technologies. Within this ecosystem, there's an interaction among customers who use the products, insurance companies they directly engage with, and automobile manufacturers/technology & service provision platforms that must design insurance products for user convenience. Hence, the roles and cooperation of each player are paramount.
<< Customers >>
⎯ "I wish there was insurance tailored just for me." ⎯
The first stakeholder in vehicle insurance is always the customer. Unlike the past, when insurance and vehicle management were individually handled, today's consumers seek more customized and flexible insurance products that reflect their driving habits and vehicle usage patterns. They prefer benefits that not only include insurance discounts but also additional benefits that improve driving convenience for consumers who understand their vehicles.
As insurance products based on driver behavior rapidly expand, consumers express a need for insurance products that reduce the risks associated with the stability of a vehicle asset and help calculate premiums based on actual driving data. Providing customized insurance products based on driver behavior through communication-based data supplied to vehicles suggests the possibility of measuring driver behaviors such as rapid acceleration, sharp turns, and driving distance, as well as improving driving habits and having more accurate insurance premium opportunities.
<< Insurance Companies >>
⎯ "Is there a more innovative vehicle insurance product?" ⎯
Insurance companies play a central role in the vehicle insurance ecosystem, and their innovation lies in providing more personalized insurance products to customers. To this end, insurance companies have a great need to use various analytical technologies and big data to more accurately assess customers' driving habits and exposure to risk. Examples include analyzing drivers' driving behavior data in real time to identify risk factors, calculating individual premiums, and continuous cooperation in the development of advanced technologies for the introduction of vehicle accident prevention features. This approach creates a positive feedback loop that encourages safe driving, in addition to fair premium determination.
The methods and approaches are very diverse. For example, offering discounts on insurance premiums for vehicles equipped with safety technologies like Automatic Emergency Braking (AEB), calculating premiums based on real data using dedicated devices, and cooperating with automobile manufacturers or technology providers to allow customers to enjoy additional benefits for specific car models. This shows the willingness of insurance companies to play a more active role in reducing and preventing risk, rather than simply transferring the driver's risk. This trend demonstrates how insurance companies are shaping the future of the insurance industry through technological innovation.
<< Automobile Manufacturers/Technology & Service Provision Platforms >>
⎯ "Data is our strength." ⎯
It's not hard to find that insurance discounts apply to TMAP, one of the most used services by domestic users. It's important to note that TMAP is not the insurer but the service provider. In this way, automobile manufacturers and related technology & service provision platforms play a crucial role in bringing 'novelty' to the vehicle insurance ecosystem, and their technological innovations significantly impact the design and provision of insurance products. For example, in cooperation with insurance companies, they can provide behavior-based insurance premium calculation services and even score vehicle condition and management information, offering benefits that catch two birds with one stone from vehicle insurance management to maintenance.
Service platforms can analyze drivers' behavior patterns in real time through communication-based vehicle connectivity technologies, exchanging precise data needed to assess drivers' risks. The massive data generated by users plays a crucial role in enabling insurance companies to perform more accurate risk assessments, calculate customized premiums, and increase customer satisfaction.
Future of the Vehicle Insurance Ecosystem
The vehicle insurance ecosystem continues to evolve, and these changes provide new opportunities for both consumers and insurance companies. Technological advancements enable more personalized and efficient insurance products, increasing customer satisfaction and improving operational efficiency for insurance companies. All stakeholders in the vehicle insurance ecosystem are embracing and adapting to these changes, shaping the future of driving experiences together.
DRIMAES has recently completed a strategic business cooperation with mobility life platform Chabot-Mobility, aiming to present new solutions to the vehicle insurance ecosystem. The biggest competitive factor in future vehicle insurance will ultimately be 'data'. DRIMAES aims to develop an integrated management platform that not only offers discounts on vehicle insurance premiums but also encompasses various services such as emergency dispatch, maintenance, and car wash, using the connected vehicle data it possesses. With this agreement, DRIMAES and Chabot-Mobility plan to jointly develop and test innovative business models in various fields.
The connected vehicle data provided by DRIMAES will strengthen the expertise of Chabot-Mobility’s proprietary car insurance comparison and recommendation service, enhancing its position as an innovative financial company and laying the foundation for new growth. Please look forward to the efforts of both companies to solidify their leadership in the field of innovative financial services based on vehicle data.
