Cost-cutting motorists to drive demand for Telematics Technology

Millions of UK motorists want telematics-based insurance policies to be introduced in the near future to help cut car insurance costs and save money, a new study has found.
Telematics technology, also known as ‘black box’ technology, involves the installation of a small device which monitors driving behaviour, such as frequency of use, speed and other habits. This information is then sent back to the insurer to help calculate premiums.
According to price comparison site GoCompare, over 50 per cent of drivers intend to switch to a car insurance policy based on this technology within the next five years.
It also revealed that motorists generally believe that these black-box based policies are fairer than traditional ones, which are calculated using a range of factors such as age, sex and claims history.
GoCompare surveyed more than 2,000 UK drivers and found that most (92 per cent) thought their motor insurance premiums should be based on the way that they actually drive, while less than half agreed that age and sex should be factors in determining insurance costs.
Commenting on the findings, Scott Kelly, head of motoring at GoCompare, said: “Given the rising costs of motoring, we think that the new generation of telematics car insurance policies will play a greater role in the car insurance market in the coming months.”
“And, as our survey shows, many drivers, across all age groups, would happily embrace the new in-car technology in a bid to keep their premiums down.”
Figures published by the AA in January showed that the cost of car insurance had risen by an average of 15 per cent year-on-year. Analysts believe this will continue to increase, particularly for women who, from December 2012, will no longer benefit from insurers taking gender into account when setting prices.