Norwich Union has launched a 'pay-as-you-drive' insurance scheme for young motorists.

Drivers aged between 18-21 can fit a 'black box' style device into their vehicle, which then uses global position systems to calculate insurance premiums based on how frequently and where they drive.

By travelling at off-peak times motorists will be able to reduce their insurance premiums and will be monthly in a way similar to paying mobile phone bills.

'The scheme brings motor insurance into the 21st century by providing affordable comprehensive insurance for young drivers in return for driving at safer times,' said programme director, Robert Ledger.

The move follows the launch of a nationwide pilot by Norwich Union in August, where 5,000 volunteers were monitored on distances travelled and the types of roads used.

US insurer Progressive has developed the telematics technology and Norwich Union has exclusive rights to use it in the UK and Europe.