Younger drivers forced into telematics by vast difference in premiums

The majority of young drivers use some form of telematics policy in the UK as premium prices forces their hands.

GlobalData’s 2024 Global Emerging Trends Survey found that 62.5% of all UK consumers who had a telematics policy were satisfied or very satisfied with the financial savings they had made from having this type of policy. Credit: PV productions via Shutterstock.com.

Premium prices for the youngest drivers in the UK continue to be priced aggressively and are forcing younger people into telematics policies. Over half of UK consumers between 18 and 25 years old who have a motor insurance policy have some form of telematics policy. Market research firm Consumer Intelligence found that the youngest group (17–19-year-olds) pay 83% more for traditional cover than telematics (£2,712 [$3,589] on average), according to the Insurance Times.

GlobalData’s 2024 UK Insurance Consumer Survey data backs up this vast difference in premiums as it shows that the youngest age group are more likely to have a telematics policy than a traditional one. It found that 68.0% of 18–25-year-olds had some form of telematics policy-40.2% via a black box and 27.9% via an app. That compares to 48.3% of respondents who were 26 or above, which highlights how younger consumers are being pushed into these types of policies.

However, it is worth noting that once consumers take out a telematics policy in the UK, they are overwhelmingly satisfied with it as well as the financial savings it can offer. GlobalData’s 2024 Global Emerging Trends Survey found that 62.5% of all UK consumers who had a telematics policy were satisfied or very satisfied with the financial savings they had made as a result of having this type of policy.

Therefore, these policies are becoming more of a necessity for consumers who face rising costs across all areas of their lives, and traditional motor insurance policies are a particularly large one. Significant savings can be made if consumers are willing to share this data with insurers and let their driving be judged. Traditional policies being nearly twice as expensive as telematics policies for younger demographics will only increase this trend, and insurers should look to offer easy-to-use policies that customers can access via a mobile app, which is becoming more popular.