Younger drivers are increasingly being offered things like telematics smartphone apps and black boxes. Despite these offerings, however, premiums for young drivers still are much higher than average, according to data and analytics company GlobalData.
GlobalData explained in a statement that younger drivers were one of the primary target audiences for new, non-standard policy types such as telematics propositions. More than 35 percent of 17-25 year olds had a telematic policy in 2018, according to a GlobalData insurance survey.
Liam Hopson, insurance analyst at GlobalData, commented, "These policies are designed to help young drivers prove they are driving safely to reduce their annual payments. However, this age category consistently pays the most expensive premiums. It is the worst for motorists under 21 years old, with their average premium being more than double the overall average premium."
Ben Carey-Evans, insurance analyst at GlobalData, added, "Insurers face the rising problem of pricing young drivers out of the market but being unable to lower premiums due to the increased risk they carry. A solution to this beyond the traditional telematics policies could be pay-per-mile policies. Start-ups, such as By Miles and Metromile have been successful in the U.K. and U.S., respectively, as they charge a small, annual flat fee and then charge by the mile – meaning consumers can limit their driving and costs if and when they need to."
Victoria Spears
Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].