A data-dilema is putting the brakes on sales of motor insurance linked to telematics.
One of the main obstacles to telematics uptake is that many drivers (56%) are not comfortable sharing personalised driving data with providers, as they might be nervous of being badged a bad driver.
Of those who have not purchased a telematics policy, nearly one in five (19%) didn’t want to run the risk of their premium going up.
Motorists are concerned that having a box with one provider might mean it is more difficult to move to another provider in the future. A third (34%) of drivers said that if a black box existed which was compatible with a number of insurers, they would be more likely to choose a telematics policy.
In the majority of cases, a black box cannot be transferred between telematics insurance providers, meaning customers who switch have to pay to get a new black box installed every time they change insurer, creating inertia in behaviour
Similarly, data gathered by a telematics black box on the quality of driving cannot be transferred between providers, meaning customers who switch provider cannot passport their driving record to their new insurer. A similar number of drivers (35%) said that the ability to passport data would increase their likelihood of switching to telematics.
Missing out on savings
Telematics insurance could save drivers an average of £482 a year, but these policies accounted for only 7% of all quotes via comparethemarket.com during 2018, where telematics policies were cheaper than non-telematics policies over a quarter (27%) of the time.
The benefits are even greater for younger drivers aged 17-24, who could pay much higher premiums due to their higher risk profile, as they are deemed less experienced. A telematics policy could save motorists aged 17-24 a staggering £938 and are the cheaper option 68% of the time.
Telematics are also far more popular amongst this demographic, accounting for nearly a quarter (24%) of all enquiries. Telematics policies can have cost saving benefits for older age groups too; 40-49-year olds could save an average of £516 and 50-64-year olds could save an average of £484.