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It has recently been announced that Norwich Union has 'paused' its pay as you drive insurance scheme due to lack of take up.
It has recently been announced that Norwich Union has 'paused' its pay as you drive insurance scheme due to lack of take up.
It launched the project in October 2006 and was the first company to embrace this type of insurance policy in the UK.
The scheme used vehicle tracking to monitor how many miles were driven, at what time of day and the type of roads used. The premium was then set using this information.
The indication was that only around 10% of its targeted 100,000 clients actually took out a policy although out of those that had over 90% renewed their policy which is well over the industry average.
Another reason mooted for the 'pause' is that the motor industry as a whole has not embraced the technology of telematics needed to monitor drivers.
Norwich Union had expected and planned for motor manufacturers to install telematics as a matter of course in new vehicles. This would have saved Norwich Union the cost of installing these units themselves thus making the proposition more viable for them. They could then piggyback on an existing vehicle unit which could ultimately be used for a whole variety of applications.
The installation of telematics units on the production line is unlikely to happen until the introduction of e-call forces the manufacturers to do it and seeing as the UK hasn't even signed the memorandum of understanding yet we are a long way from that.
The introduction of a telematics unit for the purposes of e-call is critical for the application of this type of initiative. Therefore without e-call driving this forward the death knell will always sound for this type of service. The potential benefits of e-call go far beyond the capacity of saving lives and serious injuries, I predict it will also be the future for the automotive industry.
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