BIBA Research Reveals Telematics Based Policies Almost Reaches One Million Mark

LONDON, England, Jan. 22 -- The British Insurance Brokers' Association issued the following news release:

The British Insurance Brokers' Association (BIBA) conducts annual research into the number of telematics policies live in the UK and in 2017 the number of live telematics based policies reached almost one million; standing at 975,000.1

The BIBA survey includes information from the leading telematics brands in the UK to determine the number of live policies which, shows an increase of nearly 30 percent on the 2016 figure.

Graeme Trudgill, Executive Director at BIBA, said: "It's fantastic to see technology having such a positive effect. A high proportion of telematics policies are bought by young drivers who can really benefit from the feedback on their driving behaviours that these devices give them and take more control over their own premium. The really positive news is that that almost a million road users will now have the information to help them drive more safely."

Evidence from BIBA member Marmalade, specialists in telematics insurance for young drivers, highlights the impact of this type of policy on road safety. Their telematics customers are three times safer than the UK average with only 1 in 15 having an accident within the first six months of passing their test compared to the UK figure of 1 in 5.2

Research by LexisNexis Risk Solutions strongly supports the safety benefits of telematics and concludes that telematics insurance has done more to cut accident risk than any other road safety initiative aimed at the young driver market. Since 2011, reported road casualty rates among 17-19 year old drivers have fallen by 31.07 percent, compared to 11.06 percent for the driving population as a whole. This is attributable to the one major difference on this cohort being the increased penetration of telematics enabled policies.

Graham Gordon, LexisNexis Risk Solutions said: "The benefits of telematics insurance in the young driver market are irrefutable. The cost of offering telematics policies has fallen by as much as 50 percent since 2013 and consumer confidence in telematics and willingness to use this type of insurance has jumped by 136 percent since 2013 based on our research. This all paves the way for more drivers to benefit from new, customer friendly telematics policies."

Ease of access and use of devices is key to encouraging telematics based insurance and BIBA's 2017 research also highlights the changing nature of technology. While 'black box' devices account for the majority of telematics based policies (almost 90 percent), BIBA's data now captures the use of apps and onboard diagnostics (OBD). These devices now make up 10 percent of telematics policies; their use will be tracked going forward.

Trudgill concluded: "The road safety improvements that telematics provide are absolutely undeniable and with InsurTech making them more accessible their use should be encouraged. Previous research by Ageas and the Road Safety Foundation showed that increased uptake of these policies would result in a net cost benefit to Treasury of pound sterling212m over seven years due to the reduction in kill or serious injury accident.3 That is why we are calling for a zero rate of Insurance Premium Tax on telematics based policies bought by the under 25s."

Anyone seeking telematics insurance can use the free Find-A-Broker service at www.biba.org.uk or call the service on 0370 950 1790.