Norwich Union is set to pilot pay-as-you-drive motor insurance premiums.
Instead of charging a rate based on information given by customers, Norwich Union will be recording how many miles customers are driving and what areas customers are driving in.
Pay as you drive was pioneered by US insurer Progressive in 1998. Progressive is consulting with Norwich Union on the UK insurers plans to bring the system to market by the middle of the decade.
NU hopes to have 5,000 trial users by the end of the year. It will charge users a flat fee covering liability and other risks and this will be topped up by a fee based on monthly mileage driven, area driven in and other factors provided by on board telemetry.
