29th June 2015
More than one in five, at 22%, of young male drivers have ‘black box’ insurance policies as the technology, which rewards safer driving gains in popularity, new research from Consumer Intelligence shows.
The analysis highlighted that the use of black box insurance, as type of pay as you go car insurance, also referred to as telematics, is higher among drivers aged 18 to 24 with 14% of women in that age group having policies.
Across the motor insurance market as a whole around 323,0002 drivers have live telematics policies – up 9% in nearly 18 months.
The study also showed the best way for insurers to increase the use of telematics is to target different age groups with tailored policies – younger drivers want smartphone apps and alerts with the insurers’ owning the data while older drivers prefer alerts on breakdown care and alerts on servicing while owning the data themselves.
Its own research showed 61% of motorists would take out telematics if it cut their premium while 59% would consider it if they were offered refunds for safe driving and 52% would in return for refunds on lower mileage.
However the research shows nearly two out of three motorists believe telematics will never become mainstream for motorists – 53% say it will only ever be a niche market while 9% expect to not grow and 4% even believe it will become redundant as technology improves.
Ian Hughes, chief executive of Consumer Intelligence believes however that there is still a long way to go for the motor insurance market before there is mainstream adoption of telematics.
He said: “There is increasing acceptance of telematics and genuine benefits for drivers and insurers to use it in terms of safer driving and better pricing.
“However insurers need to look at developing policies which address the needs of different age groups and reflect what they want and would value from telematics.”
But Consumer Intelligence asserted that there is genuine interest in using a black box for free – 53% of 35 to 44-year-olds would as would 53% of over-65s.
The study also found that one of the major stumbling blocks to the use of telematics – data sharing – would be overcome if customers were offered money off premiums. Around 78% would however want a reduction of more than £80.