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As insurance premiums hit an all time high, Prime Minister David Cameron has this week backed new car insurance rules to cut the cost of premiums by pledging to clamp down on whiplash claims. He labeled the UK as the ‘whiplash capital of Europe’, as claims for whiplash, even in minor accidents, are now costing the industry £2 billion a year.

Eager to show he is addressing the issues, David Cameron is keen to work with the insurance industry to look at options to make driving more affordable – including the use of telematics technology – the growth of which is set to be considerable.

Driver monitoring = fairer premiums
With the new rules currently being considered, one fairer way of paying for insurance could be brought in through widespread ‘pay as you drive’ (PAYD) schemes which are based on accurate records of individuals’ behaviour behind the wheel, rewarding safer drivers with cheaper insurance premiums.

Trimble is currently working with insurance companies to deliver this type of in-vehicle telematics technology that captures driver data, so insurers can base their premiums on individual driving behaviour. This allows the insurer to calculate on-the-road risk by considering journey time and type as well as driver actions and manoeuvres made while in the vehicle.

In addition, Trimble’s Driver Safety system can offer real-time feedback to the driver themselves so if a driver is travelling too fast, braking too harshly, accelerating quickly or even cornering too severely the system can provide a traffic light alert via a dashboard-mounted box.

Telematics and gender ruling
Insurance telematics is already proving popular with younger and inexperienced drivers because it can potentially cut their insurance premium and ABI Research forecasts the number of telematics users to grow from 1.85million in 2010 to 89 million by 2017.

An additional catalyst may also be the recent announcement that from December this year, a European Court of Justice gender ruling will take effect, preventing insurers from using gender as a factor when pricing premiums.

We all know the joke about women being poor drivers, but in fact it’s currently young men that have higher premiums because statistically they are the worse drivers. According to the Insurance Institute for Highway Safety, men are more likely to be involved in serious or fatal crashes. The new ruling will prevent insurers from utilising this information, which will result in more generalised premium levels for all drivers.

With telematics systems, however, insurers could base their premium calculations on rich data about how well individuals are really driving. This information would provide a much fairer method of determining actual risk levels, which can be reflected in individualised premiums. The data will also be available to the drivers via their insurers website so will be useful for anyone who wants to improve their driving skills; making the roads a safer place for everyone and also cutting costs.