Norwich Union is to increase its Pay As You Drive insurance trials from 5,000 to 100,000 drivers by the end of the year.
The insurance firm wants a further 95,000 volunteers to install ‘black boxes’ in their cars and use global positioning systems to calculate where and how often they drive.
The information will determine insurance premiums and, if the trials are successful, could lead to a usage-based insurance scheme for all customers.
A Norwich Union spokesman says that when the company initially asked for volunteers to take part in trials it was oversubscribed, so he believes 100,000 is a realistic expectation.
‘We will slowly increase to 100,000 boxes by the end of the year and the data we collect will determine how we move to the next stage,’ he said. ‘It will also enable us to price any schemes more accurately.’
The technology also allows the introduction of monthly itemised bills, launched last week, showing drivers when and where they drove and how much their journey cost.
The in-car tracking system takes into account whether people drive at peak times or on accident black-spot roads. By travelling on less risky roads and at quieter times, motorists could reduce insurance premiums.
The pilot has so far recorded more than 42 million miles of data from 10 million journeys.
Results of the trials, which started in 2004, show that participants are driving 2,500 miles fewer than the yearly national average. The average saving among the pilot group of 5,000 drivers and an extra 1,500 young drivers is 30 per cent.
Gartner analyst Mike Williams says Norwich Union’s extension of the Pay As You Drive trials could indicate that the insurer is close to unveiling a product for market.
‘Telematics technology is quite mature, and (Norwich Union’s parent company) Aviva already uses it in its fleet, so it is tried and tested,’ he said.
‘This trial is more about the integrity of information that the technology provides.’
Williams says the trial is being watched by insurers around the world because it offers clear benefits in pricing premiums according to risk factors, such as the age of the driver.
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Insurer revs up black-box trial
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