May 1, 2013
- 37% of car insurance buyers do not want to use a telematics device to monitor their driving and set car insurance premiums, rising to 58% of 18-24 year olds;
- Nearly a quarter of people would not be willing to use a telematics device at any discount to their insurance premiums, rising to a third for 18-24 year olds;
- 78% of respondents unwilling to use telematics thought it to be intrusive technology. Almost all (92%) of 18-24 year olds opposed cite intrusiveness as a reason.
- Insurers could do more to explain benefits of telematics to increase consumer interest
Young motorists are reluctant to accept the use of telematics - black box technology – to monitor their driving and set car insurance premiums.
Research* from Deloitte, the business advisory firm, reveals 58% of 18-24 year olds are unwilling to use the technology. While some would consider telematics if their car insurance premiums were discounted, about a third (35%) of 18-24 year old car insurance buyers would not accept telematics at any discount.
Almost all (92%) of 18-24 year old olds opposed cite intrusiveness as a reason for rejecting the technology.
James Rakow, insurance partner at Deloitte, said:
"Telematics has been put forward as a solution for the high costs young drivers have to pay for car insurance. In theory it is ideal for careful drivers within traditionally high-premium demographic groups and could enable them to benefit from lower premiums based on their driving.
"However, Deloitte's analysis indicates substantial resistance to the use of telematics in general, and particularly among the very group that the technology could benefit the most. At a time when many insurers are working hard to build a telematics solution, this gives the industry some interesting feedback about how readily their products will be received by potential customers.
"Telematics accounts for about 1% of the car insurance market. To make it more popular, insurers will have to identify carefully their target audiences such as parents who care about their children's driving and who often pay the insurance premiums."
About the research
*YouGov sampled 2,000 UK residents, aged 18+ years, online between during October 2012. The figures have been weighted and are representative of all GB adults (aged 18+).
Source: About Deloitte - In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.