Despite talk of the benefits of telematics to both insurers and motorists, only around 2% of policies sold in the UK are telematics based. The reasons for this are several-fold, but the dead weight of legacy technologies and the associated under investment in the IT systems needed to support telematics are perhaps the factors that loom largest.
Coupled with the outdated technology is the downward spiral of motor insurance premiums - average premiums fell 14.1% last year, according to the AA. This makes it very hard for insurers to pitch the potential savings of telematics to consumers already enjoying cheaper motor insurance.
So, what will happen to the motor insurance industry when the next revolution looming in its wing mirror flashes past it in a blur? The driverless car is coming.
This article studies what this technological leap means for the future of motor insurance.