Research from SSP - a provider of general insurance technology solutions - suggests significant untapped demand for telematics among older drivers.
A survey of more than 1,800 UK motorists found that more than three out of five (62%) drivers over the age of 65 would be interested in participating in a telematics scheme. This represents a potential market of 4.5 million drivers.
Premium reduction is still the main factor for drivers considering a telematics solution, but SSP’s research has also uncovered differing expectations across age groups.
Older drivers are again the most interesting prospect for insurers with almost two out of five over 65s (39.1%) willing to consider a telematics based policy in return for a reduction of up to £50 per annum.
This compares to a UK average of just over a quarter (26.3%).
Drivers aged between 25 and 34 are the least likely to be impressed with this amount, with the majority (54.5%) expecting reductions of £100 or more.
While risk reduction and education are the primary motivators for insurers, the research shows that there may also be opportunities to use telematics to offer additional services that are particularly attractive to older customers.
For example, outside premium reductions, motorists aged 55-64 are much more likely to be attracted by additional services such as breakdown cover – cited by 47.3% compared to the UK average of 41.9%, showing there is clear digital opportunity for insurers to drive deeper and less commodity based relationship with customers.
Adrian Coupland, head of data strategy at SSP, said: “With less costly and more sophisticated solutions coming on the market , the business case for rolling out telematics solutions such as SSP’s Soteria Drive to the mainstream is clearly there.
“Telematics based solutions present the insurance market with a real opportunity to tackle a number of market challenges, from accurate risk based pricing, fraud detection through to claims control and a platform for communication with their customers.
“If traditional insurers do not seize the opportunity that telematics presents, the level of market disruption from out of market businesses will be significant.”