General Insurance Article - British drivers stuck in 1st gear over Telematics


 In the dark: just 3% of British drivers have a telematics car insurance policy and a quarter (25%) don’t know what telematics is
     
  1.   Big Brother: 26% won’t consider taking out a policy, with ‘big brother’ surveillance the biggest cause of concern (62%) followed by fear of personal data being sold onto other companies (49%)
  2.  
  3.   Tipping point: £98 is the minimum drivers would need to save on their annual premium to consider taking out a telematics policy.
 Car insurance technology is baffling British drivers with just 3% having taken out a telematics policy, according to research by price comparison and switching service uSwitch.com[1]. And, despite telematics being introduced over ten years ago, a quarter (25%)of British drivers have never even heard of the technology [1].
  
 Telematics, also known as ‘black box’ insurance, aims to offer drivers cheaper premiums by basing them upon actual driving habits rather than statistics. However, the uSwitch.com research reveals that 26% of British drivers would rule out taking out a telematics policy because of fears over their privacy[2]. Of these, 62% feel it’s too ‘big brother’ and 37% don’t want their driving monitored by their insurance company[3]. Furthermore, almost half (49%) are worried that their data could be sold to other companies and a third (33%) don’t want their car tampered with when the black box is installed [3].
  
 Ahead of the Department for Transport’s study on telematics and its potential impact on road safety for young drivers, the uSwitch.com research reveals that not all drivers are against telematics solutions. 45% of drivers would consider installing a ‘black box’[5] – to learn more about their own driving skills (33%), to improve their driving (23%) or to see how well others are driving their car (5%)[6].
  
 To make telematics worth their while though, consumers would want to see savings of at least £98 a year on their insurance premium.Yet this amount differs hugely with age. Those aged 18-34 would need to save £173 to consider taking out a policy, while those over 65 would be happy with just £72 of savings[4].
  
 The research also reveals that drivers are confused about what happens with their data and who owns it. When asked, 58% incorrectly believed that telematics data is shared between insurers, 35%thought they could use their telematics data when applying for insurance and 14% believed they own their own data[7].
  
 Rod Jones, insurance expert at uSwitch.com, says:
 “Despite telematics being nearly ten years old, drivers are still in the dark about ‘black box’ insurance – confused about the technology and the full benefits it can offer.
  
 “Concerns around personal data are a major barrier to telematics adoption – in particular, how the data will be used and by whom. It’s vital that the Government and the insurance industry addresses these concerns if this technology is going to take off.
  
 “Until this happens, telematics insurance policies are likely to remain a low priority for drivers. Millions of drivers may be missing out on hundreds of pounds of savings each year, especially young drivers who are faced with high car insurance premiums.” 

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