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Crash risk drops 40% for young drivers using telematics programs, U.K. provider says

November 18, 2014   by Canadian Underwriter


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Using a telematics program has cut collisions involving new drivers by 40% six months after passing their test versus the national average, Ingenie has reported based on an analysis of the drivers using the technology it provides.

The United Kingdom-based company says that the crash risk for telematics policyholders six months after passing their driving test is one in eight, compared with one in five for non-telematics policy holders.

Related: Quindell to increase ownership in telematics insurance carrier Ingenie

That translates to 40% of crashes involving U.K. drivers between 17 and 25 being avoidable, or 28,749 collisions per year, the company said.

After one year using Ingenie telematics, crash risk among young drivers drops 50%, the company says.

In the U.K., there is no standard for the hours of practice a driver must have before their test, though the Driver and Vehicle Standards Agency recommends  47 hours of lessons and 20 hours of private practice, Ingenie notes.

However, based on its research, only 12% of young drivers actually get that much training. A telematics offering can, however, provide feedback to help young drivers continue to learn and improve even after passing their test, the report suggests.

In Canada, the Insurance Brokers Association of Ontario’s subsidiary, Independent Broker Resources Inc. will offer Ingenie’s products to drivers between 16 and 24, distributed through the organization’s members. According to Ingenie’s website, the telematics provider will also soon provide online quotes to Canadians.

Related: IBAO’s telematics subsidiary ‘reached out’ to Alberta auto insurance regulator

In the United Kingdom, Ingenie is advocating for the Insurance Premium Tax (IPT) to be exempt for young drivers who have telematics policies. IPT is a 6% tax on all car insurance policies, which Ingenie says adds around £100 to the cost of a policy.

Exemption of the tax would stimulate uptake of a still opt-in product, while allowing insurers to reduce premiums, the company argues.

Exemption of the IPT for those drivers could allow for the take up of 245,000 additional telematics policies, according to Ingenie.

Ingenie adds that 70% of its policyholders earn a discount for safe driving, while 93% achieve a no claims discount after their first year, regardless of age or gender.

Related: Aviva Canada commits to IBRI and Quindell telematics solution

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