Norwich Union has stopped offering pay-as-you-drive policies, which use telematics information to allow it to bill policy holders based solely on when and where they drive their cars.

The company blamed the slow uptake of telematics systems, especially the failure of carmakers to install the systems at the manufacturing stage, meaning the insurer had to foot the bill for aftermarket installation of the systems for each customer.

Norwich Union has confirmed that while it has stopped offering the policies and has already written to all affected customers, fleets that are insured with the company will not be affected.

“This is only private car policy holders who will be affected,” said a Norwich Union spokesman.

“None of the fleet customers who use telematics systems will be affected, for them it is business as usual and there are no plans at present to withdraw from this area of the market.”