News Non-Life20 Feb 2018

South Korea:Insurers and govt back aftermarket auto parts

20 Feb 2018

The South Korean government is promoting the use of aftermarket auto parts, with plans to provide cash back rewards to users.

The Financial Supervisory Service (FSS), the General Insurance Association of Korea, and the Korea Insurance Development Institute (KIDI) are encouraging consumers to opt for aftermarket auto parts.

Aftermarket auto parts, which are of comparable quality to original equipment manufacturers' (OEM) products, according to the KIDI, are priced 25% cheaper on average, reported Korea Bizwire.

Under the new policy, drivers who are covered by own damage car insurance will receive 25% cash back from insurance companies when they buy aftermarket auto parts, instead of those made by the OEM.

As South Korean automobile manufacturers such as Hyundai Motor and Kia Motors have legal protection for a long-term market monopoly in OEM parts, the measure is first implemented for auto parts for foreign cars.

Adhering to OEM parts has resulted in the rise of insurance premiums, said Lee Chang-wook, a senior official at the FSS.



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