Increase in telematics policies
Newly released research by the British insurance Brokers’ Association (BIBA) shows a nine per cent increase in the number of live ‘black box’ telematics motor insurance policies.
These types of policies can offer savings of up to 25% for careful drivers. In particular, young drivers who often struggle to find affordable cover, can save up to £1,000.
BIBA surveyed the leading telematics insurance providers in the UK to determine the number of live policies currently in use in the market. The results showed an increase of nine per cent compared to the same time last year. There are just under 323,000 live policies compared to 296,000 in December 2013.
The technology uses hard-wired ‘black boxes’ in the vehicle to monitor a number of different factors such as speed, cornering, acceleration, braking and familiarity of route. These are calculated to give a risk profile – with the safest drivers enjoying the biggest discount.
Graeme Trudgill, executive director at BIBA, said, ‘BIBA’s new research shows that this innovative area of motor insurance continues to grow and this is demonstrated by the fact that more and more brokers have launched products to meet this demand. Young drivers can make the biggest savings, you can find a broker at biba.org.uk.’
The increase in sales comes as BIBA’s Manifesto calls on the new Government to consider insurance premium tax (IPT) relief for telematics policies for young drivers in a bid to reduce accidents and make driving more affordable. The Department for Transport is conducting research to demonstrate the value of behaviour based policies and have now completed the first stage, the feasibility study.
BIBA member research shows that one in eight new drivers with a telematics box crash in their first six months on the road compared to one in five nationally1 (without a blackbox).
Young drivers are over-represented in road fatalities. They make up just 12% of licence holders, yet account for 25% of road deaths.
Recent research commissioned by insurance company Ageas2 showed that such an IPT break for under 25s over a seven year period would cost HM Treasury £199m, but would bring a net benefit of £699m to the economy during the same period through fewer accidents.
Andy Watson, CEO Ageas UK, said, ‘Removing IPT on telematics products would increase take-up and promote safer driving among young people. It would reduce the number of serious road crashes – which cost the economy an average £400k each according to the Department for Transport.’
Chris McKee, CEO of BIBA member Ingenie, said, ‘Our data shows a 40%1 reduction in crash risk for new young drivers with a telematics policy, compared to the national average. Removing IPT would help spread this benefit to more young drivers by encouraging greater take-up.’