Demand for in-car telematics boxes seeing strong growth, says Direct Line Group CEO

Meanwhile, shift away from RBS data centres is already delivering benefits for Direct Line, says firm

Demand among motorists for black boxes that monitor driving habits and help to determine insurance prices is hugely increasing, according to Paul Geddes, the CEO of insurer Direct Line Group.

In a Q&A released by the firm after its latest financial results, Geddes said that telematics was "something really big for the future".

"We're sending out lots of these little black boxes, which slot into the diagnostic port in people's cars. The appeal of that is going up, over 50 per cent of drivers that we speak to on the phone - young drivers - take one of these boxes out," he stated.

Insurers say that the telematics devices can enable consumers to get discounts, while also allowing the insurance companies to better differentiate between good and bad drivers.

Geddes believes that Direct Line will make "more and more use of the data [the firm] gets out of these devices".

The insurance firm has put a strategic investment into The Floow, a firm that specialises in data analytics, to help it to digest the data it retrieves from the black boxes.

Rival insurance company AXA's group CIO and COO, Kevin Murray, told Computing that the use of telematics would be the norm in five years, citing the growing use of the technology in the US as a template for the UK.

"Consumers will be able to give up the data for the right price. As long as there is a benefit for the consumer, we're betting that it's going to be the norm," he said.

Direct Line migration from RBS continues

Meanwhile, Direct Line also said that it is has continued to roll out its new data centres in conjunction with Capgemini and new voice and desktop tools as part of its IT migration away from RBS.

The firm signed a £100m five-year contract with Capgemini in January to design, deliver and run a new IT infrastructure. The company said that the total cost base for the first half of 2014 was 5.4 per cent lower than the first half of 2013 as the benefits from initiatives such as the IT migration project began to emerge.

RBS has to divest the whole of the Direct Line Group by the end of 2014. In February, it announced plans to sell the remaining stake in the insurer, which could net the bank a cool £1bn.