The Co-operative is paying out discounts of more than £100 to nearly 90% of its young driver customers, who have agreed to have telematics technology installed in their cars.

Under the Co-operative’s Young Driver Insurance product, which was launched in March, drivers between the ages of 17 and 25 have their motoring skills monitored by a small telematics box fitted to their car.

Using the smartbox technology, the drivers’ behaviours is scored every 90 days. If motorists make the top scores in all four categories - speeding, cornering, braking and acceleration, time of day of driving- they are given a partial refund on their initial premium.

The cash-back is a reward to motorists who have driven safely, such as keeping to speed limits, avoiding excessive harsh braking and acceleration.

The Co-op said that 88% motorists who have taken out the product would receive an average discount of £102, which represents 8.5% of the initial cost. Under the Young Drivers product, customers are eligible for a maximum annual discount of 11% of the initial premium paid.

Even before the discount was applied, the Co-op said the average premium paid by Young Driver insurance customers is £1,727, significantly undercutting the average premium of £2,294 that the AA’s most recent statistics show 17-22 year olds are forking out.

A sample of the data collected by the Co-op of its customers shows that nearly four in five (78%) consistently drive within speed limits with 40% of males and 41% of females achieving the top score in all categories.

Co-operative director of general insurance David Neave said: “Insurance has been rising at a disproportionate rate for young drivers, but telematics offers a genuine solution to stop this trend and prevent a generation of young people being driven off the roads.

“We believe that other insurers need to now play their part in finding similar solutions so that as an industry we can offer fairer prices to all young drivers in the UK.

“More than that, we can see that our ‘carrot’ rather than ‘stick’ approach of rewarding motorists for driving responsibly is leading to better driving behaviours. Our scheme is only in its infancy, but if it was taken up on a larger scale it could be a major step forward in improving the safety on Britain’s roads.”

Road safety charity Brake Campaigns Director Julie Townsend said: “Persuading young drivers to make safer choices is vital in preventing more lives being needlessly cut short.

“We applaud this scheme for rewarding young drivers who stay within the law and drive responsibly, such as by slowing down to give themselves more time to react to hazards.

“This is an innovative and practical way to help young people protect themselves and others. We hope it will help to pave the way to a safer driving culture among young people, and fewer devastating deaths and injuries on our roads.”

The data collected from a sample of 1,300 young drivers shows that nearly four in five (78%) consistently drive within speed limits. It also shows that 40% of males and 41% of females achieved the top score in all categories.

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