Uptake of 'black box' motor insurance devices has increased by more than a quarter among the UK's under-30s, despite persistent privacy concerns.
That is according to new research by data and analytics firm GlobalData, which found that the use of telematic devices increased by 28.6% among young drivers between 2020 and 2021.
The findings also indicate that 28.3% of under-30s believe they will be driving fewer miles annually than before the pandemic.
However, 17.3% highlighted privacy as an issue with telematics, while 27.3% felt uncomfortable with the idea that someone was grading their driving ability, and 31% were put off by the idea that the box had a direct line with their insurer.
Benjamin Hatton, insurance analyst at GlobalData, said that it is perhaps surprising that younger consumers find the idea of data sharing and privacy to be such sticking points, considering their considerable online presence.
“Advertising the potential financial savings black boxes and usage-based products can provide may go some way to addressing these concerns,” he continued.
“However, there also needs to be a reassurance that these services are intended to help young drivers, rather than acting as a Big Brother that’s constantly watching for errors.”
Telematics track and record a policyholder's driving behaviour, and allow insurance premiums to be tailored based on how safe or risky motorists are behind the wheel.
This could be particularly beneficial for young drivers, who are traditionally charged higher motor insurance prices than other age groups.
The demographic that saw the greatest increase in car insurance premiums during the final quarter of last year was young male drivers aged between 21 and 30, with their prices rising by 6-8%.
“Telematics can unlock discounts for good drivers, which could help young drivers who are subject to considerably greater average premiums for their car insurance,” Hatton said. “This will become especially important as the cost-of-living crisis continues.
“The rollout of 5G networks across the UK will further facilitate mobile telematics. Moving to mobile will also remove installation costs, meaning the services are both more accessible and more affordable.”
Image credit: Shutterstock
Author: Chris Seekings