Telematics can make motor insurance policies cheaper and safer. However, insurers offering telematics should also start to focus on its green credentials. Its ability to reduce driving mileage and speeds will lead to more environmentally friendly motor insurance customers. Research from The Green Insurer suggests this could be a new angle for insurers to sell such policies to younger drivers.

GlobalData’s 2023 UK Insurance Consumer Survey found that a good record on sustainability is either quite important, important, or very important to 79.7% of consumers. Furthermore, it found that 35.4% of consumers would be willing to pay more for a more sustainable product. This increased to 57.3% for respondents aged 30 or under. The advantage insurers have with telematics is they do not require customers to pay more for such a policy, as it is cheaper more often than not. This considerably strengthens the proposition for those younger customers.

The Green Insurer’s study found that 35% of respondents were likely to consider telematics policies in the future. This was in part driven by sustainability, with 20% of those citing environmental benefits as a reason. This increased to 39% for younger drivers (18–24), which emphasises that sustainability is a more important factor for younger consumers.

This feels like a potential win-win for insurers. The impact on the environment may seem limited by small changes in driving habits, such as a telematics policyholder reducing their driving speed in pursuit of premium discounts offered in return for good driving. Yet this could be impactful on a larger scale. Telematics policies were not necessarily designed as part of insurers’ push to sustainability and net zero, but this could be a bonus for them.

While telematics policies are now mainstream, they have not been a complete success story. Many drivers remain unsure about sharing data and having their driving ability judged. Therefore, highlighting telematics as a green option—in addition to being cheaper and safer—could help persuade more consumers. Designing sustainable products or offsetting policies is going to be a key trend going forward, so highlighting the environmental benefits of telematics policies would appear to be a sensible strategy for motor insurers.

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