Insurers can market telematics as inexperienced, in addition to low cost

Telematics could make motor insurance coverage insurance policies cheaper and safer. Nonetheless, insurers providing telematics also needs to begin to deal with its inexperienced credentials. Its capacity to cut back driving mileage and speeds will result in extra environmentally pleasant motor insurance coverage prospects. Analysis from The Inexperienced Insurer suggests this could possibly be a unique approach for insurers to promote such insurance policies to youthful drivers.

GlobalData’s 2023 UK Insurance coverage Client Survey discovered {that a} good report on sustainability is both fairly vital, vital, or essential to 79.7% of shoppers. Moreover, it discovered that 35.4% of shoppers can be prepared to pay extra for a extra sustainable product. This elevated to 57.3% for respondents aged 30 or below. The benefit insurers have with telematics is they don’t require prospects to pay extra for such a coverage, as it’s cheaper most of the time. This significantly strengthens the proposition for these youthful prospects.

The Inexperienced Insurer’s examine discovered that 35% of respondents had been prone to contemplate telematics insurance policies sooner or later. This was partly pushed by sustainability, with 20% of these citing environmental advantages as a purpose. This elevated to 39% for youthful drivers (18–24), which emphasises that sustainability is a extra vital issue for youthful shoppers.

This appears like a possible win-win for insurers. The impression on the surroundings could seem restricted by small modifications in driving habits, similar to a telematics policyholder decreasing their driving pace in pursuit of premium reductions supplied in return for good driving. But this could possibly be impactful on a bigger scale. Telematics insurance policies weren’t essentially designed as a part of insurers’ push to sustainability and web zero, however this could possibly be a bonus for them.

Whereas telematics insurance policies are actually mainstream, they haven’t been an entire success story. Many drivers stay not sure about sharing knowledge and having their driving capacity judged. Subsequently, highlighting telematics as a inexperienced choice—along with being cheaper and safer—might assist persuade extra shoppers. Designing sustainable merchandise or offsetting insurance policies goes to be a key pattern going ahead, so highlighting the environmental advantages of telematics insurance policies would look like a wise technique for motor insurers.