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Daily Insurance Industry News
Sunday 26th of May 2019
June 16, 2008

NU withdraws “pay as you drive” policy

by Gill Montia

Story link: NU withdraws “pay as you drive” policy

Norwich Union has withdrawn its “pay-as-you-drive” motor insurance scheme.

The policy was launched at the end of 2006 and used new technology to lower accident rates by changing motorists’ driving patterns, and subsequently lower their insurance premiums.

With a global positioning system fitted in each policyholder’s vehicle, premiums were based on the distance driven, the time at which journeys were taken and the areas travelled.

The scheme was aimed at young drivers, who statistically are more likely to be involved in accidents between 11pm and 6am than older drivers.

At night, almost half of the people who are killed on the road are aged under 24 and “pay as you drive” cover for night time driving was expensive, costing up to £1 per mile.

The policy has now been suspended because of low sales. Some experts attribute the poor take-up to the technology involved, which tracked every journey taken and could give motorists the feeling of being under surveillance.

 

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