Rising motor premiums may be a key concern for the general public, but Labour’s hostile approach to insurers won’t win votes from the industry
It is good to see political parties trying to add impetus to the uptake of telematics. Greater adoption of the technology means better underwriting data for insurers, better rates for safer drivers and, of course, more business for the telematics providers.
However, Labour’s assertion that it will “force” insurers to offer at least one telematics product after a one-year grace period is likely to make the industry bristle, and appears to be more about political point-scoring than improving the situation.
A good thing, the wrong way
It’s understandable why Labour would want to get on the motor insurance pricing bandwagon. Prime minister David Cameron struck a chord with the industry and the public after hosting a summit with insurance chief executives in February, aimed at stamping out compensation and, ultimately, lowering motor insurance premiums, which all agree are too high. As part of this, the introduction of telematics was discussed.
The insurers left the meeting with the sense that they had taken a good first step and that the gathered ministers were genuinely interested in moving forward rather than ‘insurer bashing’.
Judging by this morning’s news, Labour’s stance is far more aggressive and anti-insurance. “Unlike the do-nothing Conservative-led government, Labour would give insurance companies a year to put their house in order before considering forcing every insurer to offer at least one black box product to benefit safer drivers,” Labour shadow transport minister John Woodcock said.
This is likely to rub insurers up the wrong way. Motor insurers have made no secret of their desire to adopt telematics, and many of the big names are making moves towards telematics under their own steam.
The Labour stance on rising premiums for women also attacks insurers unduly. The European Court of Justice’s gender ruling means that, as of 21 December this year, insurers will no longer be able to underwrite based on the sex of the driver.
Woodcock claims that insurers will use this as an excuse to hike premiums for women “to the highest level they think they can get away with”, which could mean per-policy increases of up to £362. However, Woodcock fails to mention that premiums for the two genders are likely to converge as a result of the ECJ ruling, with premiums for men falling.
The introduction of telematics would certainly help insurers weed out the safe drivers from the reckless ones, regardless of gender. However, Labour might be taken more seriously by the industry if it drops its confrontational approach and tries to help insurers do what they already want to do anyway.