Telematics is one way of helping young drivers to stay safe on the roads when the driving instructor is no longer by their side. It helps young people to stay focused on their driving until they have built up that experience, the lack of which poses one of the greatest threats to their safety. Creating safer drivers enables us to offer them lower premiums, and for young drivers cost is often a key consideration. We also have a commission based scheme for approved driving instructors that help to sell Marmalade’s products, so it’s a win-win for all involved.
Why should young people be encouraged to take this route?
On the evidence that we have seen and certainly through our own experience, telematics is cheaper than non-telematics based products.
We are asked about the privacy issue quite a lot, but from the media rather than our customers. We are not interested in what our customers are doing, where they are going and at what time. We don’t have curfews and believe that driving is all about giving young people freedom, that we don’t want to – and it’s not our job to - curtail. What we are here to do is help them to be as safe as possible when behind the wheel. If our systems flags driving that could put them at risk, we will look at the incident and call them to discuss what happened and how they can avoid such situations again. If young people are really concerned about their privacy, they don’t have to take our products – but they will then have to pay more for their perceived anonymity.
We are convinced that it makes drivers better, the very fact that we‘ve created a very profitable business stands testament to this fact – claims are down but more importantly young people are involved in less accidents. On a national basis, 1 in 5 drivers is involved in an accident with our customer base this is reduced to 1 in 20. Yes, there is an element of self-selection but a large number of young people are not crazy drivers and choose to have telematics insurance over non-telematics products.
Considering the government lack of action despite the positive noises early on, should there be a greater push on government to support telematics insurance? Absolutely, and for a long time we have been calling for the government to support telematics to help save young drivers’ lives. It’s a proven solution to many of the problems facing young drivers on the roads today and it absolutely deserves recognition at this level. The insurance tax should also be cut to make the premiums even cheaper in the first two years, something else that we have been campaigning for along with many others in the industry. We do all we can to keep premiums low for our customers and remain well below the industry average in terms of increases, but there is a limited amount that we can do while insurance tax remains at the current level.
Do you see telematics insurance becoming the insurance for all motorists of all ages over the next few years, or are costs and the prospect of autonomous vehicles going to prevent this?
Autonomous vehicles on a large scale are still 10 – 15 years off, but I still don’t think that telematics-based insurance will spread to other groups. This is a real shame as the data provided by telematics enables insurers to match premiums to drivers based on their behaviour behind the wheel, making insurance fair and transparent. However, the cost is currently prohibitive so it’s really only going to work for those drivers deemed at highest risk.
What do you hope to see in the next 12 months for telematics insurance?
I don’t envisage any sweeping changes in the next 12 months for telematics. What I am looking forward to is more data available which can then be used to offer a more dynamic pricing model. There are also likely to be more value-add products available.