Resistance rising to telematics-based insurance
New research suggests high premiums are forcing young drivers to take telematics-based insurance and creating a lifetime of resistance against the technology.
Analysis of 6,868 insurance quotes in November found that traditional policies for 17-19-year-old drivers were on average £2,172 more expensive than telematics-based policies.
The Consumer Intelligence research found that 83% of drivers in that age bracket couldn’t afford the difference, meaning that if they wanted to drive they had no choice but to take telematics-based insurance.
However, instead of introducing young motorists to the benefits of telematics, it is turning them against the technology, with only 51% of drivers aged 25-29 retaining it and only 25% of drivers aged 35-39.
Insurance sceptics
Ian Hughes, CEO of Consumer Intelligence, said: “Insurers have weaponised pricing to create a captive audience, then wonder why adoption collapses after age 25. They’re not building a customer base; they’re creating a generation of connected-insurance sceptics.
“The industry is training an entire generation to hate the technology it needs them to embrace for usage-based and connected insurance products in the future.
“Insurers think they’re selling clever technology. Customers hear ‘we don’t trust you.’ That fundamental miscommunication is costing young drivers thousands and threatening innovation adoption for decades to come.
“Insurers need to stop selling surveillance and start selling recognition. Our research shows customers who feel recognised and in control have three times higher voluntary adoption rates. The industry is literally explaining its way out of billions in future premiums.”
