Insurers ‘aren’t promoting’ telematics enough to consumers

Telematics is still viewed as a niche option rather than a mainstream proposition within the insurance industry.

That was according to Andrew Little, head of marketing and sales at Redtail Telematics, who told Insurance Times that insurers are not promoting telematics enough to consumers.

Telematics propositions see a black box device installed into a motor vehicle to track driver behaviour and ultimately influence the cost of that driver’s insurance premium.

According to a survey published by carbon neutral underwriter The Green Insurer in February 2024, 81% of UK car drivers are now aware of telematics-based insurance, demonstrating that the appetite for these products is tangibly increasing.

Little said the “insurance industry recognises that telematics technology can and is being used to bring premiums down, but they aren’t promoting it to consumers”.

He added: ”The issue is that while most insurers now have some form of telematics proposition, whether through a broker partnership or as a distinct part of their in-house capabilities, it is still seen as a niche part of their business and the benefit is limited to how telematics data is used to rate for risk and how it can be used to better inform and incentivise drivers – typically young drivers.”

Survey findings

This comes after a YouGov survey of 2,000 motorists, which was commissioned by Redtail Telematics, found that four out of five of the cheapest car insurance quotes were telematics-based.

The study also found that motorists using a black box could save up to 13% on their premiums by switching to a telematics insurance option.

Yet, “only 8% of respondents received communication from insurers about adopting telematics-based insurance to reduce premiums”, explained Little.

He added: ”Car insurance is essential for millions across the country. It’s not just a legal requirement, but a crucial form of protection.

“Yet responsible drivers have seen premiums rise far beyond inflation. The richness and relevance of telematics data remain invaluable to insurers committed to fair pricing, improved road safety and responding to environmental concerns.”

He also called for insurers to make telematics data portable, allowing good drivers to carry their records to other providers.

Little said: “Customers who drive well should be able to take that record to other insurers to negotiate a better price, but that is currently not possible.”