Insurance companies gather data to lower premiums for young drivers

With the huge amounts needed to be paid by young drivers in the first few years of driving, insurance companies are now offering reduced price insurance on condition that the driver installs a Smartbox.

The Smartbox will monitor a driver’s habits including braking, acceleration, cornering and speed. It also tracks when a car is used, essential information for insurance companies as most accidents seem to happen at night.

The insurance data gathered allows companies to rate drivers on a 1-5 basis where 1 is dangerous and 5 is safe. Those who score 4 or 5 are rewarded with a reduction on their renewal premium. Those who score 1 or 2 will see their premiums rise.

The driver can log in to a website to see their Smartbox report which will help to improve driving skills in respect of safety and rating, lowering their premium.

The Co-op is the first to offer this scheme. They have analysed 15,000 drivers who signed up to have these boxes fitted. With the boxes fitted, drivers were found to be 20% less likely to be involved in an accident than those without one and in the instances where they were involved in a crash the incident was less serious and damage and injury costs were almost 33% lower.

Taylor Ramsden, a young driver, was one of the first to take up this option. His first year premium for his Daewoo Matiz was £1670 but reduced by £190 because he fitted the Smartbox. He is rated as one of the top ten drivers in the country and his careful driving has paid off as his second year premium is reduced by a huge £700.

Other insurers are now considering the scheme.

While novice drivers will obviously gain from the scheme a law change could see women under 30 also opting for this type of cover. From December the rates of insurance for men and women will be the same but while sexual equality rules that they must be charged the same – the Smartbox could allow a woman to earn a lower priced policy if her driving is seen to be safer than a man in the same car.

Many leading insurance firms are now looking to approach young drivers with their “Smart Box” solutions – by utilising Revive managements insurance mailing lists they can target these individuals via direct mail, email marketing, SMS and telephone. Revives vehicle marketing lists allow insurance firms to segment their marketing communications by vehicle make and model information, engine size and any other variables that would be included on an insurance quotation.

For more information on our insurance marketing data please email or call a member of our team on 0844 6930244

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