Consumer Intelligence study finds 62% of drivers think it will not take off
Most drivers think telematics will not break into the mainstream, according to a new study from market research firm Consumer Intelligence.
Consumer Intelligence polled 1,995 motor insurance customers in March 2015. The survey found that 62% of drivers think telematics will never take off.
Fifty three percent of those polled said it will remain a niche product, while 9% think it will die out.
Despite these attitudes, Consumer intelligence found growing use of telematics.
Across the motor market as whole around 323,000 drivers have live telematics policies, an increase of 9% in nearly 18 months.
Use of telematics is highest among drivers aged 18 to 24. Some 22% of young male drivers have telematics, as do 14% of women in the 18 to 24 age group.
Consumer Intelligence’s research found that the best way for insurers to increase the use of telematics is to target different age groups with tailored policies.
It said younger drivers want smartphone apps and alerts, with the insurers’ owning the data, while older drivers prefer alerts on breakdown care and alerts on servicing while owning the data themselves.
The research also shows 61% of motorists would take out telematics if it cut their premium. Fifty-nine percent would consider it if they were offered refunds for safe driving and 52% would in return for refunds on lower mileage.
Consumer Intelligence chief executive Ian Hughes said: “There is still a long way to go for the motor insurance market before there is mainstream adoption of telematics.
“There is increasing acceptance of telematics and genuine benefits for drivers and insurers to use it in terms of safer driving and better pricing.
“However insurers need to look at developing policies which address the needs of different age groups and reflect what they want and would value from telematics.”
Consumer Intelligence found there is interest in using telematics for free: 53% of 35 to 44-year-olds would as would 53% of over-65s.
The research also showed that one of the major stumbling blocks to the use of telematics – data sharing – would be overcome if customers were offered money off premiums. Around 78% would however want a reduction of more than £80.