Regulator urges insurers to reflect auto tech advance in premium

Published : Feb 24, 2017 - 09:51 Updated : Feb 24, 2017 - 09:51

South Korea's top financial regulator called on the local insurance industry Friday to take the rapid technology development related to self-driving cars into account in setting premiums.

Yim Jong-yong, chairman of the Financial Services Commission, cited a looming paradigm shift in the financial sector in the era of the fourth industrial revolution.

Yim Jong-yong, chairman of the Financial Services Commission, speaks at a meeting on the fourth industrial revolution in Seoul on Feb. 24, 2017, in a photo provided by the FSC. (Yonhap)

"With the advent of advanced self-driving cars in the long term, in particular, the auto insurance industry is expected to go through complete changes across the board," he said in a weekly meeting with civilian experts on pending financial issues. "The industry is bracing for the typhoon of the fourth industrial revolution."

This week's session focused on discussing ways to cope with another industrial revolution.

Yim pointed out that automated vehicles are equipped with various devices to help reduce accidents often caused by drivers' faults.

"Such a technology change should be reflected in auto insurance," he said.

For instance, Yim added, there is a report that the death toll of car accidents in the US will decrease by 21,700 a year if the ratio of self-driving cars in operation reaches 90 percent there.

South Korea started a full-fledged drive to develop such vehicles with its first test drive conducted in March last year.

Controversy has already erupted over clear legal responsibility for an accident during autonomous driving.

The FSC chief emphasized the need for a "precise forecast of the typhoon's route and impact" in joint efforts by the authorities and the industry and "pre-emptive preparations." (Yonhap)