Average Auto Insurance Premium Drops to 680,000 Won Last Year, Down 2.3%

Mileage-Based Endorsement Enrollment Rate Reaches 88.4%
Average Refund Per Person Hits 133,000 Won

Last year, the average insurance premium for individual auto insurance policyholders was 680,000 won, marking a 2.3% decrease compared to the previous year.

On the 13th, ahead of the Lunar New Year holiday, vehicle traffic is congested near Jamwon IC on the Gyeongbu Expressway in Seocho-gu, Seoul. Yonhap News

On April 21, the Korea Insurance Development Institute announced that the number of individual auto insurance policies in 2025 increased by 1.1% year-on-year to 19.03 million.

The average premium per vehicle was 680,000 won, down 2.3% from the previous year.

The decrease in premiums was attributed to the expansion of compensation limits in line with rising average vehicle prices, along with the increasing prevalence of online policy enrollments and discount endorsements.

Insurance companies offer premium discounts of up to 13% per device for vehicles equipped with advanced safety features such as emergency braking and lane-keeping assistance systems.

The installation rate of advanced emergency braking systems rose to 44.3%, up 6 percentage points from 38.3% in the previous year. The installation rate of advanced lane-keeping systems increased by 5.5 percentage points to 43.8% from 38.3% year-on-year.

The enrollment rate for mileage-based discount endorsements also climbed to 88.4%, up from 84.7% in 2023 and 87.3% in 2024.

As insurance companies returned more premiums to customers with mileage-based endorsements, the average refund per person reached 133,000 won. This amount increased from 129,000 won in 2023 and 130,000 won in 2024 to 133,000 won last year.

About 9 out of 10 (89.5%) policyholders with mileage-based endorsements met the criteria for discounts and received premium refunds.

The trend of purchasing insurance through cost-effective, non-face-to-face (CM) sales channels also became more pronounced.

Last year, the insurance enrollment rate through mobile and internet CM channels was 51.4%, up 1.9 percentage points from 49.5% in the previous year.

Enrollment through face-to-face channels (31.7%) and telemarketing channels (15.8%) decreased by 1.9 percentage points and 0.5 percentage points, respectively.

According to the industry, the insurance premiums for policies purchased through mobile or internet channels are on average about 18% lower than those purchased through face-to-face channels.

Heo Chang-eon, President of the Korea Insurance Development Institute, stated, "In a situation where vehicle operation reductions are being called for, such as the implementation of an odd-even driving system due to the recent surge in oil prices, mileage-based endorsements offer a way for drivers to save on fuel costs and enjoy premium refund benefits by driving less."

He emphasized, "The Korea Insurance Development Institute will continue to actively support the development of products that simultaneously address consumer demand for coverage and cost efficiency."

This content was produced with the assistance of AI translation services.