The number of live telematics policies in the UK exceeded three quarters of a million for the first time in 2016, according to annual research from 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, on a like for like basis, shows an increase of nearly 25 percent on the 2015 figure.
Graeme Trudgill, executive director at BIBA, said: “It is encouraging to see such a big take up of telematics policies. Motor insurance premiums for young drivers are higher than for other drivers because statistically they have more accidents, but the safety advantages of telematics help to reduce users’ premiums.”
Mike Ketteringham, CEO of BIBA member ingenie, said: “Telematics insurance makes a huge difference to the safety of a young driver, particularly when coupled with effective feedback and education. The soaring number of black box policies is great news and shows we’ve reached a tipping point where young drivers and their families appreciate that telematics is a better option financially, and are willing to work alongside us to reduce crashes.”
These types of policies can offer savings of up to 25 percent for careful drivers, said BIBA in a statement, noting that data provided by the “black-box” technology builds a personalized risk profile based on an individual’s actual driving.
Ongoing monitoring of driving behaviors encourages better, safer road use, added BIBA. Indeed, research from insurance provider ingenie shows that telematics-based feedback can halve a driver’s risk of crashing over their first policy year, it added.
BIBA member Marmalade, specialists in telematics insurance for young drivers, has seen exceptionally strong safety results. Studies show that one in five young drivers have an accident within the first six months of passing their test, yet with Marmalade that figure significantly improves to only one in 16, making their young drivers three times safer.
“Insurance Premium Tax (IPT) forms a significant part of the motor insurance premium – this is set to increase to 12 percent in June 2017,” said Trudgill. “We believe that removing IPT from telematics based insurance for young drivers would encourage the take up of this type of policy which, in turn, because of the accident reduction effect, improves road safety.”
In its 2017 Manifesto, BIBA formally calls on government to reduce the rate of IPT on telematics-based motor insurance to zero.
Francois Xavier-Boisseau, CEO of Ageas Insurance, said: “Young drivers in the UK are far too likely to be killed or seriously injured on our roads and pose a significant danger to other road users. Increasing the uptake of telematics by the under 25s would help to encourage and incentivize them to drive more safely. If the government removed Insurance Premium Tax for telematics products it could boost demand and is a clear, simple action that could be implemented quickly.”
Source: British Insurance Brokers’ Association (BIBA)