- Advertisement -
Tuesday, November 26, 2024
Home News Fleet Telematics ‘to shake up’ auto insurance industry – Fitch

Telematics ‘to shake up’ auto insurance industry – Fitch

The motor insurance industry faces a “significant shake-up” from the growing usage of telematics or vehicle-monitoring systems, according to Fitch Ratings.

Telematics systems are expected to have a big impact on the insurance industry for at least the next five years, particularly in the UK, where take-up could grow rapidly, the ratings agency said in a statement.

The UK insurer Direct Line last week revealed that it had doubled the number of telematics policies sold in a year. These policies, which involve the use of equipment to monitor driving behaviour, allow the insurer to more accurately assess risk for individual policyholders.

While overall telematics penetration remains low at about 2% of Direct Line’s motor insurance policies, it is around 60% for drivers under 21 years of age, reflecting the significant discount these policies can offer.

The UK has some of the highest premiums for young drivers as well as high rates of fraudulent insurance claims, which means it could be one of the biggest adopters of telematics, Fitch Ratings noted.

Direct Line’s high take-up of telematics policies by young drivers and strong retention rates point to growth of telematics policies over the coming years, which could gain further momentum if backed by government incentives. However, attracting older drivers will likely be harder as the potential premium discount may be smaller than for a new driver. Older drivers may also be more wary of the monitoring technology, the statement said.

The advantage for insurers in offering telematics policies is being able to more accurately determine premiums based on drivers’ risk profiles, rather than relying on traditional pricing factors like age, postcode and type of car. “Early evidence suggests that the lower premiums on these policies are more than offset by cost savings due to better risk selection and better driving behaviour by policyholders with telematics,” Fitch Ratings said.

- Advertisement -
Jerusha Sequeirahttp://www.meconstructionnews.com
Jerusha Sequeira is a reporter contributing to Big Project ME and Truck & Fleet ME magazines. She writes news and features on topics across the construction, machinery and commercial vehicles industries in the UAE and wider Middle East and contributes to the digital platform daily. She graduated from the American University of Sharjah in 2014 with a BA in Mass Communication/Journalism. Jerusha has previously interned with the local daily Gulf News, and has worked with on-campus publications at AUS.
- Advertisement -

Most Popular

Nissan turns to CAFU and YallaCompare for aftersales and insurance services

Nissan Middle East has announced the signing of two strategic partnership agreements with CAFU, a leading fuel delivery and vehicle service platform and YallaCompare,...

PlusX Electric advocates for sustainable charging solutions for EVs

Dubai-based PlusX Electric is advocating for the use of ‘more eco-friendly, non-super-fast chargers for electric vehicles (EV)’, stating that there are substantial environmental benefits...

AJEX Logistics Services set to expand with new facility at Bahrain Cargo Village

AJEX Logistics Services (AJEX), a prominent express distribution and shipping solutions provider in the Middle East, has signed a Letter of Intent (LOI) with...

HEAT Show 2024: Action-packed HEAT Show opens in Dammam

The HEAVY EQUIPMENT AND TRUCK (HEAT) SHOW has officially opened its doors at the Dharan Expo, bringing together key players in the heavy equipment...

Related News

HEAT Show 2024: Al-Kifah strikes 100 unit ready mix truck deal

XCMG has continued its impressive week at the HEAT Show with a major deal to supply 100 units to Al Kifah, one of the...

PlusX Electric advocates for sustainable charging solutions for EVs

Dubai-based PlusX Electric is advocating for the use of ‘more eco-friendly, non-super-fast chargers for electric vehicles (EV)’, stating that there are substantial environmental benefits...

AJEX Logistics Services set to expand with new facility at Bahrain Cargo Village

AJEX Logistics Services (AJEX), a prominent express distribution and shipping solutions provider in the Middle East, has signed a Letter of Intent (LOI) with...

HEAT Show 2024: Action-packed HEAT Show opens in Dammam

The HEAVY EQUIPMENT AND TRUCK (HEAT) SHOW has officially opened its doors at the Dharan Expo, bringing together key players in the heavy equipment...

HEAT Show 2024: Tata Motors launches first AMT Truck in Saudi Arabia: Prima 4440.S

Tata Motors has unveiled its first-ever Automated Manual Transmission (AMT) truck, the Prima 4440.S AMT, in Saudi Arabia. Based on the brand’s flagship Prima platform,...

LEAVE A REPLY

Please enter your comment!
Please enter your name here