Only 4% of drivers currently have it fitted in their vehicles, but nearly one in five will consider adding telematics technology to their insurance plans at their next renewal date as the “black box” becomes mainstream.
Nearly 80% of motorists are aware of telematics, a technology that monitors drivers’ behavior and can trim premiums for careful drivers or those with low mileage,according to a report by market research firm Consumer Intelligence. Consumer intelligence polled 1,571 UK drivers in an online survey in September.
“It is clear the market is changing,” Ian Hughes, chief executive of Consumer Intelligence, said, citing high awareness and the interest of nearly 1 in 5 drivers. The possibility of lower premiums for careful or less frequent drivers could be an attractive deal for motorists struggling with steep insurance fees, high petrol costs, and car payments. Telematics will have to overcome several hurdles to increase its market share, however.
“There is of course a difference between considering and actually buying and the numbers who have black box policies remain relatively low,” Hughes said. One reason for low adoption may be a misconception about telematics’s target audience. Nearly 57% of motorist think black box insurance policies were geared toward young motorists, who, with steep insurance rates, could perhaps save the most off their premiums. Only 25% think that all drivers are the target market.
Drivers may also not be confident that their driving abilities, when monitored, can trim their premiums. Only 47% would consider a policy that rewards safe drivers with lower premiums and imposes price hikes on unsafe drivers. That compares with the 52% who would consider a policy that reflected annual mileage, with the possibility of a refund if their annual mileage was less than anticipated. However, 84% of surveyed motorists would consider changing to a telematics insurance policy that fitted the black box in their vehicles for free and lowered premiums for safer drivers, but didn’t punish unsafe driving with steeper rates.
However, “the launch of new products for the market and increasing acceptance of the benefits of black box policies will mean the sector should grow,” Hughes said. One of these new policies cites was the SoteriaDrive smartphone app from SSP and Wunelli, which provides quick, cost effective access to telematics technology and its savings.
Meanwhile, 18% of motorists believe the market share of black box insurance policies will increase, with fully 15% anticipating that all drivers will have it in the future.