The rise of telematics-based insurance

Figures this week from Biba suggest sales of ‘black box' telematics car insurance policies have increased five-fold in the last two years and are expected to reach 500,000 policies in the next two years.

Gocompare.com's own research earlier this year suggested that 57 per cent of drivers believe they will switch to a telematics or behaviour-based insurance policy in the next five years. However, the research also outlined the steps the industry still needs to take to make "black box" car insurance policies more attractive to consumers:

75 per cent of drivers would expect cheaper car insurance premiums
54 per cent would like regular incentives in terms of discounts and special deals
43 per cent want to hear on the benefits of behaviour-based policies
40 per cent would like savings on fuel by driving better or less
35 per cent want to see big insurance brands offering behaviour-based policies
33 per cent would like to be able to access data on their driving behaviour via a PC-based dashboard
29 per cent would appreciate advice on how to improve their driving based on their own data 

Scott Kelly, head of car insurance at Gocompare.com commented, "The figures are encouraging. The telematics approach has wide appeal - not just with young drivers.  However, if it is to expand beyond a niche product there needs to be big name providers in the market, genuine savings on premiums and more communication about the benefits.

"Over the last few years we've seen car insurance premiums reach record highs.  The outlook for 2012 is little better with further uncertainty for young drivers once the European Court of Justice gender ruling takes effect.  Telematics does allow responsible young drivers to take matters into their own hands in a bid to control the cost of their insurance."