Telematics trends in the UK
Usage of telematics is growing quickly in the UK, targeting young drivers and addressing some of the issues created by the new EU gender directive.
What is telematics insurance?
Telematics insurance requires the installation of a device on the vehicle, commonly called a “Black Box”. This device communicates with on board instruments to monitor a series of parameters like hours of the day when the vehicle is driven, the distance driven, they type of roads where the car is driven and the speed of the vehicle during the journey.
Furthermore it can control more subjective aspects of the driving style, such as the accuracy of steering and the steering angles, as well as the ability to avoid sudden accelerations or decelerations.
In case of an accident the “Black Box” can also register crucial data about the car in the accident such as direction, speed, vehicle position and collision angle.
Re-launching telematics insurance in UK
Telematics is anything but new from a technical point of view – Progressive Auto Insurance in the USA and Norwich Union in the UK commercially implemented telematics back in the early 2000’s.
At that time the installation cost of the device and its complexity limited the success of telematics and it was only marketed as a niche product targeting very low mileage users. Marketing focused only on two aspects: recording total mileage and collecting key data in case of an accident (similar to the function that black boxes have on airplanes).
The introduction of smartphone technology combined with an easier & cheaper installation process have enabled a re-launch of telematics insurance starting from 2010, with a completely different target segment: young drivers.
Benefits of Telematics Insurance
In the UK, young drivers have been paying very high and unsustainable insurance premiums for many years, because time series clearly demonstrate that the risk profile for a young and unskilled driver is significantly higher than the average:
- One out of five drivers has an accident in the first year driving
- 26% on the road accident involve at least one driver aged between 17 and 24
- The majority of accidents that take place on Fridays and Saturdays involve at least a young driver