South Korean Insurtech Carrot has acquired the exclusive right to use for BBI (Behavioral-Based Insurance)

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Aug 05, 2024, 08:00 ET

Safe drivers can get up to 20% off their insurance premium through behavioral-based insurance

Carrot launched a behavioral-based insurance on May 30, offering up to a 20% discount on premiums for policyholders who drive safely.
Over the past years, Carrot has collected data from 1.5 million customers, analyzing 7.4 billion km to derive driving scores.
There have been only two exclusive rights in the auto insurance category since the 2020s, both involving Carrot.
Carrot provides discounts and reimbursements based on driving score achievements and has praised for its originality and progressiveness.

SEOUL, South Korea, Aug. 5, 2024 /PRNewswire/ -- Carrot General Insurance Corp ("Carrot"), Korea's first and largest full-stack digital insurance platform, announced that it has acquired the exclusive right to use for behavioral-based insurance (BBI) for six months from the General Insurance Association of Korea.

This achievement is significant as it marks the first time in four years and four months that an exclusive right has been granted in the auto insurance category among all property and casualty insurers. Auto insurance, a compulsory product sold by 12 general insurance companies, is typically standardized 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.

Carrot has pioneered an industry-first system that offers discounted benefits to all 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 analyzing 7.4 billion km of driving data. It has been highly rated for motivating safe driving during the insurance period and providing personalized feedback to help customers monitor and improve their driving habits.

Since Carrot launched a behavioral-based insurance on May 30^th, 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% 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% to 17%.

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 realize 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."

Meanwhile, the exclusive right is effective for six months from the date of approval. Carrot has been offering the behavioral-based auto insurance product since May 24.

[Appendix: Company Information]

Based in Seoul Korea the company was established in 2019 through a JV partnership with some of the big-name investors, including Hanwha, SK Telecom, Hyundai Motor Group, Altos Ventures, STIC Investments. Being the nation's first fully-licensed 100% digital insurance carrier, Carrot has been disrupting the market with innovative products and has outpaced its global peers in terms of the speed of acquiring customers to its usage-based insurance program. The company's successful footprint owes itself to strong customer value propositions, including easy and accessible insurance, transparent premiums, AI automated accident registration and prompt dispatch of help services all made possible via proprietary technology. Until early July 2024, the company has written over 2 million auto insurance policies and distributed different types of protection products through cross-selling and embedded insurance platforms. The company is pursuing business in behavioral-based auto insurance, which assesses the premiums as per customer's driving patterns and behavior through sensor data analytics to better manage risks of policyholders. Carrot has various national & international partnerships, including Hyundai Motor Group, Tmap Mobility, and Naver. Carrot aims to expand its data-driven products beyond auto insurance to include non-auto insurance such as pet, driver's protection, and home, evolving into a data-driven holistic care & lifestyle platform in the future.

In August 2022, Carrot has successfully closed the series A funding of 175B KRW led by private equity firm Affirma Capital. Recently in December 2023, the company has secured additional 130B KRW. Carrot's spokesperson has stated that the fund will accelerate its sophistication of in-house technologies and open innovation activities to keep the J-curve growth at an even faster pace.

SOURCE Carrot General Insurance