The majority of young motorists do not want to have their driving monitored to help set car insurance premiums even though they would benefit most from the move, according to research published by Deloitte yesterday.
The consultancy found that 58% of 18-24 year olds surveyed on its behalf were unwilling to use a telematics device, the black box technology that relays information to insurers such as speed, breaking and acceleration behaviour. This was significantly higher than the 37% of respondents for the survey as a whole who said they were against using it.
Similarly, over a third (35%) of respondents aged 18-24 were against using telematics even if it meant their car insurance premiums were reduced, higher than the quarter of all respondents who expressed this view.
Intrusiveness was a key reason for peoples' opposition to the technology and was cited by 78% of respondents. This rose to 92% for the 18-24 year-old age group.
Telematics has been put forward as a key way for young drivers to reduce their traditionally high car insurance costs by making it easier to identify more careful drivers and reduce their insurance premiums accordingly.
However, James Rakow, insurance partner at Deloitte, says the research had found 'substantial resistance' to the use of telematics in general, and in particular among the group the technology could help the most.
'At a time when many insurers are working hard to build a telematics solution, this gives the industry some interesting feedback about how readily their products will be received by potential customers,' he said.
'Telematics accounts for about 1% of the car insurance market. To make it more popular, insurers will have to identify carefully their target audiences such as parents who care about their children's driving and who often pay the insurance premiums.'
Yesterday, the Association of British Insurers published guidance to help drivers get the most from telematics. The guides, one aimed at consumers and the other outlining good practices for the insurance industry, aim to reflect the potential for the technology to 'dramatically change' the motor insurance market, the ABI said.
Kate Carr, the association's head of fraud and specialist lines, added: 'The emergence of telematics technology presents a new challenge for insurers as they design new products that best meet the needs of their customers. The guidance released today will help insurers develop products that are consumer friendly, while also helping consumers understand whether a telematics policy is right for them.'