The Financial Supervisory Service said on the 15th it will push to "rationalize the motorcycle insurance rating system" to ease premium burdens for subsistence and young delivery riders and to strengthen the rights and interests of two-wheeler drivers.
The Financial Supervisory Service (FSS) will gradually rationalize personal injury coverage premiums for for-hire motorcycles. Currently, some insurers, citing a lack of subscribers, set rates using only their own data, which has led to premiums being set higher than household policies with similar loss levels. In response, the FSS will encourage rate-setting based on all-insurer statistics held by the Korea Insurance Development Institute, and is reviewing a plan to cut for-hire personal injury coverage premiums to 20%–30% of current levels. However, it plans to push the cuts gradually, taking into account the accumulation of statistics and each insurer's loss ratio.
The FSS will also expand eligibility for hourly motorcycle insurance for delivery riders. Hourly insurance is a product in which the premium is paid only for the time spent delivering, introduced to ease premium burdens, but some insurers have restricted enrollment by those under 24, citing loss ratio management. The FSS will improve the system so that young delivery riders aged 21 and older who find it difficult to enroll in annual policies can sign up for hourly insurance if they pay premiums commensurate with their risk.
The FSS will also refine the system for carrying over discount grades in motorcycle insurance. Currently, motorcycle insurance allows discount grade carryover only if an existing policy is maintained, and if a new policy is taken out after replacing a vehicle, past driving experience is not recognized. The FSS will improve the system so that, as with auto insurance, even if a two-wheeler is replaced and a new policy is taken out, the discount grade from the past policy can be carried over. However, for holders of multiple vehicles, only the discount grade of the most recent policy that expired within the past three years will be carried over, and in improper cases, a special surcharge system will be applied.
The improved system is scheduled to take effect immediately in the first quarter of next year after revisions to the Korea Insurance Development Institute's reference rate manual and each insurer's rate manual.