Data privacy concerns stall adoption of telematics car insurance

Data privacy concerns are the number one barrier stopping UK motorists from embracing usage-based insurance (UBI), with 62% of UK motorists worried about sharing their personal location information.

This is according to the latest global UBI consumer study from telematics and connected motor insurance platform IMS, which revealed that only 32% currently allow or would feel comfortable sharing their driving data. 

Previously referred to as ‘black box’ car insurance and typically deployed for inexperienced drivers, UBI is a type of motor policy where premium is based on driving behaviour, not just age, postcode or vehicle.

As technology has advanced, insurers have mostly moved on to using smartphone apps to track speed, braking, mileage and time of travel to assess a policyholder’s road risk more accurately.

As a result, UK drivers expressed concern about sharing their personal driving data with fears of data misuse, security breaches and location tracking topping the list.

This is despite IMS claiming that in some cases UBI policies could save drivers up to £1,137 a year.

Andrew Brown-Allan, executive vice president of growth at IMS, said: “Consumers see the benefit in fairer pricing and personalised cover, but they want to know exactly what’s being collected, how it’s used and who has access to it.

“That level of transparency simply isn’t the norm in the insurance industry yet – and consumers clearly have reservations about sharing any more data than they are already expected to.”

’A privilege, not a right’

The study was conducted in April 2025 across the UK with over 1,000 participants aged 25 to 54.

On an international scale, the IMS survey involved over 5,000 motorists and revealed that more than half of respondents said they were either unwilling or unsure about adopting UBI, even though 72% were open to the idea in principle.

Despite the promise of lower premiums and personalised cover, the research also revealed that only 19% of UK drivers have ever used a UBI product.

IMS argues that these figures prove that UBI will remain a niche product until consumers’ privacy concerns are addressed.

Brown-Allan added: “Insurers must treat additional data from consumers as a privilege, not a right.

“People need to feel they are in control of their own driving data – that it works for them, not against them.”