A new era of insurance for young drivers gets into gear.

A new era of insurance for young drivers gets into gear.

Just days after MPs called for an overhaul of the insurance industry to cut costs and use advanced technology, Co-operative Financial Services has launched its pay-how-you-drive scheme.

Unlike previous pay-as-you-drive schemes which merely varied premiums by time of day and distance, the new pay-how-you-drive policy uses an in-car Smartbox with sophisticated accelerometers to analyse the behaviour of a driver. It monitors braking and acceleration, cornering, speed and time of day and works in conjunction with a comprehensive database of UK roads.

The data is downloaded daily by a radio-link and the driver and insurance company can judge if the vehicle is being driven well or badly and premiums will be accordingly reduced or increased, but some may even be cancelled in the very worst case.

Drivers can view the downloaded recorded data on a computer programme which gives them a ‘dashboard’ display of their recorded history and shows if they are safe or need to switch driving styles, all backed up by helpful advice from the Brake charity.

Good driving can bring an almost immediate 11pc reduction in monthly premium but risky driving pushes it up 15pc, and anything which would have led to an immediate disqualification by a court will result in policy cancellation after nine days once it’s reviewed.

The technology has been trialled by CFS using 10,000 drivers and with premiums for a 17-25 year old male topping £3,500 it believes it can reduce the cost for genuinely careful young drivers.

“It will create a highly personal policy specific to a particular driver,” said Cooperative Insurance director David Neave. “It is a fact that many young people are simply being priced out of owning a car due to the escalation of premiums and we want to dispel the assumption that all young people will drive badly and have accidents. With this technology we can see how safe or risky a driver is behaving.”

The technology also sweeps away the conventional way of assessing premiums by gender, which is now being outlawed from 2012, and replaces it with timely and accurate method based on an individual. It could ultimately be extended to all drivers and may bring premium reductions for the elderly motorist as well.

TUESDAY, 29 MARCH 2011 13:18
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Nick Ansley, product manager for CFS, said once a policy holder agreed to the scheme the Smartbox would be fitted inside 21 days and took just 35mins to connect up. It also doubles up as a tracker if the car is stolen and can send police to locate it and the thieves, which also helps keep down costs and premiums.

Brake campaigns director Julie Townsend said an 18 year old driver was three times more likely to be involved in a crash as a 48 year old and road accidents are the biggest cause of death among teenagers so it was calling on the Government reduce young driver casualties as Britain joined the UN Year of Global Action on Road Safety.

She added, “The CI product makes complete sense and shows people how risky or safe they are driving and how it can affect their premiums.”

Car crash victim Nick Bennett, of London, who is confined to a wheelchair following brain and physical injuries in an accident, added that he wished he had been able to use a scheme such as the Smartbox to assess his driving before the life-changing accident he sustained as a teenager in July 2002.

Motoring journalist Quentin Wilson said he believed the Smartbox was the start of a motoring revolution which would stop young drivers being priced out of the market and either prevented from driving or driving without insurance, which would impact on their ability to work and contribute to society and added, “This scheme uses the science of data to assess risk and produce a premium and that’s a good thing.” Robin Roberts Miles Better Automotive News Agency