A majority of drivers in the six largest motor insurance markets in Europe have indicated they are willing to embrace telematics-based products in consumer research carried out by Towers Watson.
Interest is highest in Italy and Spain, where around 70% of drivers in each country said they were definitely or probably interested in taking out a telematics policy. Across all six participating European countries, 55% of drivers indicated some interest in telematics insurance. The comparable figure for the United States, where telematics is already becoming a mass market product, was 50%.
If the offer of a telematics policy came with a guarantee that the premium would not increase, 64% of European drivers surveyed said they would be interested, with consumers in The Netherlands responding most positively to this incentive.
However, interest is not confined to the younger drivers to whom most existing telematics insurance products in Europe have been targeted. Less than 10% of drivers in France and Germany who expressed an interest in telematics were under 24.
Significant numbers of drivers over 35 responded positively to the potential to receive extra services at additional cost, with theft tracking, automated emergency calls and breakdown notification among the most popular. Overall, consumers in Germany, Italy, Spain and the UK indicated a willingness to pay €32-34 per year for these value-added services, while drivers in France and The Netherlands were prepared to pay somewhat less at €22 on average.
Many older drivers also said they would be willing participants in ‘try before you buy’ programmes, although interest in using a smartphone app to access telematics services tends to drop off based on age. Across all age groups, a self-installed device is the preferred technology option in all countries, with over 80% acceptance across the six European countries surveyed.
Duncan Anderson, global property and casualty pricing leader at Towers Watson, commented: “The study shows it’s wrong to believe that telematics insurance is just a young driver proposition. While it’s particularly likely to appeal to a younger age group on economic grounds, as the technology costs fall and awareness of the wider benefits increases, drivers of all ages are potential targets for telematics insurance providers with the right proposition.”
Another important factor uncovered in the research, according to Towers Watson, is that in many markets ‘pay as you drive’ products are likely to penalise the very drivers who are most interested in telematics – those who drive more frequently.
Duncan Anderson noted: “Products that focused on mileage, restricted times of vehicle usage or simple ‘event counters’ seem likely to have a short-term future. The indications are that the appeal of telematics to most consumers is largely associated with ‘pay how you drive’.”
The research also explored factors that might deter consumers from taking out a telematics motor policy. Aside from worries that the premium might increase, most concerns were associated with how personal data would be managed and used. Such issues were most prevalent for Germans although, interestingly, the over 65s who are among the most interested in telematics in Germany are also the least concerned about privacy issues according to the research.
Other findings compiled into a research report – Telematics: what European consumers say – include support for products aimed at parents - as have been common in the United States, and attitudes towards changing driving behaviours in order to benefit from telematics premium rating.
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