Only 4% of survey respondents had been informed of how telematics products can reduce premiums, according to the firm’s latest survey
Only 4% of of customers have received communication from their insurers regarding potential cost savings from switching to telematics-based insurance policies, according to Redtail Telematics’ survey, published today (25 July 2022).
Exactly 2,000 UK respondents were asked about their attitudes to using telematics-based insurance policies in May 2022 for the research – which was commissioned in partnership with YouGov.
The low levels of communication around the benefits of telematics partly boil down to the lack of transparency offered by price comparison websites (PCWs), said Redtail.
The firm added that telematics propositions were seen as a niche business.
Dr Colin Smithers, Redtail Telematics’ chief executive, said that – as a result of insurers’ message not getting through to consumers – the “public’s understanding of all the benefits telematics policies can bring is correspondingly poor”.
However, “the richness and relevance of telematics data remains invaluable to those insurers committed to fair pricing, improved road safety and responding to environmental concerns”, he added.
Considering the FCA’s new pricing rules – which were implemented in January 2022 to prevent the practice of price-walking – Redtail Telematics’ believed that black-box solutions can offer the opportunity to reduce premiums, in addition to delivering benefits like improved driver safety and advanced first notification of loss (FNOL).
Providing an insurtech’s perspective, James Blackham, chief executive at By Miles, said: “The cost-of-living crisis is baring its teeth for drivers – with fuel, repairs and the price of cars on the rise – and many of us are having to make changes.
“Half of road users have reduced their mileage through the cost-of-living crisis and may now be better off with pay-by-mile insurance.
“On average, those drivers who switched to By Miles were able to save around £300 a year – which will help with expenses elsewhere.”