The number of live telematics-based policies reached almost one million – standing at 975,000 in 2017, according to the British Insurance Brokers’ Association (BIBA).
The BIBA survey includes information from the leading telematics brands in the UK to determine the number of live policies which, shows an increase of nearly 30 percent on the 2016 figure.
“It’s fantastic to see technology having such a positive effect,” said Graeme Trudgill, executive director at BIBA, in a statement.
“A high proportion of telematics policies are bought by young drivers who can really benefit from the feedback on their driving behaviors that these devices give them and take more control over their own premium,” he added. “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, specialists in telematics insurance for young drivers, highlights the impact this type of policy is having 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 five, BIBA said, quoting statistics from Marmalade’s New Driver Insurance policies, incepted April 2016 to March 2017..
“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,” said BIBA.
Since 2011, reported road casualty rates among 17 to 19-year-old drivers have fallen by 31.07 percent, compared to 11.06 percent for the driving population as a whole, which is attributable to the increased penetration of telematics-enabled policies, said BIBA, quoting LexisNexis statistics.
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 percent), BIBA’s data now captures the use of apps and onboard diagnostics (OBD) – devices that now make up 10 percent of telematics policies.
“The road safety improvements that telematics provide are absolutely undeniable and with insurtech making them more accessible their use should be encouraged,” said Trudgill.
Previous research by the insurer Ageas and the UK Road Safety Foundation showed that increased uptake of these policies would result in a net cost benefit to Treasury of £212 million (US$300 million) over seven years due to the reduction in deaths or serious injury accidents, he said. “That is why we are calling for a zero rate of Insurance Premium Tax on telematics-based policies bought by the under 25s.”
Source: British Insurance Brokers’ Association (BIBA)