The British Insurance Brokers’ Association recently announced that telematics-based motor car insurance policy sales have skyrocketed, with projections of the next two years bringing 500,000 such sales in the UK alone.
The car insurance brokers’ trade body has said they’ve found a five-fold increase in the take up of ‘black box’ telematics insurance over the past two years. The popularity of telematics insurance is because it can result in significant reductions to a driver’s car insurance rates, provided they drive in a safe and responsible manner; younger drivers have been drawn to the new technology in droves in an effort to reduce their massive premiums.
There were only 12,000 telematics policies taken up in 2009, according to Biba’s research. However, in the first six months of this year alone, the figure has grown to 180,000, and is on track to hit 500,000 by 2013, the industry body added.
Telematics insurance, which works by keeping a close eye on a driver’s behaviour behind the wheel before sending off the gathered data wirelessly to an insurer, has grown from only being offered by niche insurers to major industry players. Car insurance companies such as the AA, Swinton, and the Co-op all offer telematics-based policies now, with all indications being that there will be more major insurers following suit.
Many have turned to the new tech as a way to counteract the rate hikes in store for female drivers coming at the end of the year as a result of a ruling from the European Court of Justice. The EU ruling makes it an offence to use gender as a base for determining risk for financial products such as insurance policies, which will result in premiums for female drivers to come up dramatically to match their statistically more-risky male counterparts.
As telematics does not measure anything but the actual behaviour of a motorist behind the wheel, it is not affected by this new ruling. The results can be dramatic for drivers who re careful motorists, experts say.