The number of live telematics-based insurance policies reached 975,000 in 2017, according to the British Insurance Brokers’ Association (BIBA).
The BIBA annual survey includes information from the leading telematics brands in the UK to determine the number of live policies, which showed an increase of nearly 30% on the 2016 figure.
Graeme Trudgill, executive director at BIBA, commented: “It’s fantastic to see technology having such a positive effect. A high proportion of telematics policies are bought by young drivers who can really benefit from the feedback on their driving behaviours that these devices give them and take more control over their own premium.”
“The really positive news is that that almost a million road users will now have the information to help them drive more safely.”
Evidence from BIBA member Marmalade, specialist in telematics insurance for young drivers, highlights the impact of this type of policy on road safety.
Marmalade’s telematics customers are three times safer than the UK average, with only one in 15 having an accident within the first six months of passing their test compared to the UK figure of one in 5.2
Research by LexisNexis Risk Solutions strongly supports the safety benefits of telematics and concludes that telematics insurance has done more to cut accident risk than any other road safety initiative aimed at the young driver market.
Since 2011, reported road casualty rates among 17- to 19-year-old drivers have fallen by 31.07%, compared to 11.06% for the driving population as a whole. This is attributable to the one major difference on this cohort being the increased penetration of telematics-enabled policies.
Graham Gordon of LexisNexis Risk Solutions said: “The benefits of telematics insurance in the young driver market are irrefutable.”
“The cost of offering telematics policies has fallen by as much as 50% since 2013 and consumer confidence in telematics and willingness to use this type of insurance has jumped by 136% since 2013 based on our research.”
“This all paves the way for more drivers to benefit from new, customer friendly telematics policies.”
Ease of access and use of devices is key to encouraging telematics-based insurance and BIBA’s 2017 research also highlights the changing nature of technology.
While ‘black box’ devices account for the majority of telematics-based policies (almost 90%), BIBA’s data now captures the use of apps and onboard diagnostics. These devices now make up 10% of telematics policies.
Trudgill concluded: “The road safety improvements that telematics provide are absolutely undeniable and with InsurTech making them more accessible their use should be encouraged.”
“Previous research by Ageas and the Road Safety Foundation showed that increased uptake of these policies would result in a net cost benefit to Treasury of £212 million over seven years due to the reduction in kill or serious injury accident. That is why we are calling for a zero rate of Insurance Premium Tax on telematics based policies bought by the under 25s.”