The societal benefits of telematics

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As a leading provider of data and advanced analytics, LexisNexis Risk Solutions has been supporting the provision of telematics insurance in the UK and in insurance markets globally for nearly a decade. Telematics insurance evolved in the UK as a means to help the youngest, most inexperienced drivers with the highest accident risk gain access to insurance for vital road experience and to incentivise safer driving.

Because telematics insurance adoption in the UK young driver market is nearing mass penetration, we set out to study its impact in reducing road casualties in this age group, and to see what other conclusions could be drawn from this trend.

What we found from our research is that amongst the youngest drivers (17–19 year-olds), road casualties have fallen by more than 35% over the past seven years, compared to 16% for all motorists. In parallel, we examined the penetration of telematics insurance in this age group which has now reached 80–90% market penetration. One of the distinguishing differences between young drivers and their older counterparts is that an estimated 4 out of 5 young drivers are covered by telematics insurance.3

Our study marks the first time road casualty statistics have been analysed in direct relation to the exponential 875% growth based on 100,000 telematics policies in 2011 and 975,000 active policies in 2017. Our analysis suggests telematics insurance has done more to cut accident risk than other road safety initiatives targeting the young driver market.

In this whitepaper, we describe how we conducted our analysis and present a five-point plan to help encourage more motorists to adopt telematics-enabled insurance products.