Female Drivers Show a 43-Percent Increase in UK Telematics Insurance
May 13, 2013
Insurance companies assess the risk of their drives based on many different criteria, and gender used to be one of them. New EU gender directives will eliminate gender as criteria, and instead rely solely on how the individual drives and the type of car being driven. This is one time where gender equality might be a disadvantage to women. A recent four-year study of 19,000 motorists who were monitored on 40 million journeys and 154 million miles of travel concluded that women are safer on the road. Some insurance companies used this and other studies to lower the premium for women drivers. However, young women drivers are finding themselves with higher premiums because of the gender directive. For this reason, telematics insurance with pay-as-you-drive policies is increasingly becoming the preferred choice for women.
Telematics insurance with pay-as-you-drive monitors the amount of mileage the person drives, and the insurance company individualizes the premium based on this data. The theory is, the less a person is on the road, the more likely they will be involved in an accident. A report from Tiger.co.uk, one of the U.K.'s leading car insurance comparison sites, found a 43-percent jump in telematics sales for females in the first quarter of 2013 compared to the same period in 2012, which is four times higher than telematics sales for male drivers.
The directive is forcing insurance companies to eliminate gender as a criteria and young women drivers are having a difficult time getting affordable traditional car insurance.
The difference in male-to-female sales might be the privacy issue related to telematics. Having a telematics device monitor the vehicle at all times by a private company might not bode well with many people, but male drivers seem to have a bigger issue with it. Depending on the parameters set by the insurance company, telematics can record many different motorist behaviors. This includes miles driven, time of day, location, speed, breaking and other data.
Insurance companies can use this data to increase or lower premiums for good and bad drivers. While women are being smarter and taking advantage of telematics insurance, the technology can be used by young drivers of both genders.
"We’re very pleased to see an increase in telematics sales to female drivers. This shows that in the face of the pricing increases for younger female drivers that are the result of the EU Gender Directive, more young women are out to definitively prove that they are safer drivers. They understand that the use of this new technology in insurance could save them money," said Andrew Goulborn, commercial director at Tiger.co.uk.
Edited by Rachel Ramsey
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