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The Actuary The magazine of the Institute & Faculty of Actuaries

Over-45s unaware of potential insurance savings through telematics

Almost half of adults aged over 45 in the UK are unaware that they could enjoy savings on their car insurance through telematics technology, a survey has found.

Telematics expected to transform the industry ©Shutterstock
Telematics expected to transform the industry ©Shutterstock

This is despite the research from Redtail Telematics finding that the over-45s are missing out on savings of up to 10% by failing to make the switch.

Providers have traditionally targeted the under-25s market, with 61% of the five cheapest quotes for this age group coming from telematics-based polices, compared with 8% for the over-50s.

However, Redtail Telematics CEO, Dr Colin Smithers, said insurers could be missing out on a significant opportunity by failing to target older motorists.

“Telematics can offer a great way to avoid expensive premiums but it’s up to providers to present the case for savings via telematics for older drivers,” he continued.

“For the 25-49 age bracket, telematic quote levels are just 13%, with the over-50s at an even lower 5%. Both of these numbers have remained broadly static for the past 12 months.”

This comes after a survey of UK and US insurers found that 53% expect most drivers to use telematics by 2023, with the technology widely expected to transform the industry.

And a third of the insurance companies surveyed predicted that all motorists would be scored on their driving ability within a decade.

Meanwhile, business advisory firm Deloitte has said it expects telematics-style motor insurance policies in Europe to be valued at around €15bn (£12.26) by 2020.

“There is a common misconception that telematics policies only benefit young drivers, whereas people of all ages stand to save considerable amounts,” Smithers continued.

“The benefits of telematics and the incumbent financial savings should be available to all.

“Some of this arises from more focused pricing, but it is also because policyholders are guided to drive more safely and are genuinely a lower risk to themselves and others.” 

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