New analysis of the latest UK road casualty statistics by LexisNexis Risk Solutions has begun to uncover compelling evidence that telematics insurance has played a role in cutting claims costs for insurers amongst the youngest, most vulnerable drivers, by helping to reduce casualties by over a third since 2011. Car casualty rates among 17-19 year old drivers have fallen by 35%, compared to 16% for the driving population as a whole. The one major difference between young drivers and their older counterparts is telematics insurance, with 4 in 5 young drivers estimated to have a telematics policy today.
This is the first time road casualty statistics have been analysed in direct relation to the exponential growth in telematics policies since 2011 with 975,000 live policies in 2017, suggesting telematics insurance has done more to cut accident risk than other road safety initiatives aimed at the young driver market.
The 35% reduction in road casualty rates in 17-19 year olds is despite the 10% increase in the number of vehicles on the road (2011-2016) and a 7% increase in the number of driving licences held across all ages since 2012.
The analysis underlines the drive in the insurance sector to extend the benefits of telematics insurance into the mass consumer market with telematics policies and data collection solutions for specific customer segments, each lowering in cost to the insurer as the driver risk lowers.
Graham Gordon, Director, Global Telematics, LexisNexis Risk Solutions says; “Our analysis and interpretation of the publically available road casualty statistics factors for key road safety advances such as improved roads, better junction design and new car safety technology – but the marked downward trend in the 17-19 age bracket points to an additional factor at play, the increasing availability and adoption of telematics insurance.
“This analysis is vitally important. It helps validate the sector’s significant investment in the proposition by providing firm evidence of the role of telematics in cutting claims losses whilst improving the market’s ability to offer insurance to the most risky drivers on our roads. But most importantly it reveals the mass market potential for telematics, to help arrest the recent rise in road casualties in the wider motoring population and enable the market to truly realise its investment in telematics.
“The cost of offering telematics has fallen dramatically for the insurance sector – we estimate data acquisition costs have fallen by as much as 50% since 2013. At the same time our research shows that consumer confidence in telematics and willingness to use this type of insurance with 4 in 5 people comfortable with the idea of telematics insurance. Innovative insurers and brokers are already focusing on new products and data collection solutions with advances in technology to track driving behaviour such as white label off the shelf mobile applications enabling speed to market. This has made it possible to offer telematics insurance at a very low cost for the whole driving population.
“With such a growing body of evidence showing that telematics is having a direct impact on cutting road accidents and thereby claims costs, combined with the fall in costs for the sector, the evolution of telematics insurance with products for each customer segment is already well underway.”
- Road safety figures (Stats 19) have generally plateaued since 2011/2012.
- 500 people are killed or seriously injured on our roads every week
- In 2017, 1,793 people were killed on our roads, an average of 5 people every day and just under 25,000 people were seriously injured.
- 73 people a day are either killed or seriously injured on our roads. Last year’s annual total was the highest since 2011.
- Amongst drivers aged 25-59 road casualties rose by almost 4% in 2017 vs 2016
- There has been a 6% increase in the number of deaths on motorways.
- Car accidents are the biggest killer of teenagers, according to WHO.
- Drivers aged 17 to 24 currently make up only 7% of drivers, but they represent nearly 20% of the people killed or seriously injured in car crashes.
- The 18-25 year old age group make up close to 25% of all motor insurance claims and the average claim amongst the youngest drivers is £4625, which is double that for drivers aged 51 to 70.
- In 2012, amongst 17-19 year olds, for every 37 drivers there was a casualty. In 2017 this increased to 1 in every 48 young drivers – a 29% improvement.
- The Government estimate that road traffic collisions cost the UK economy in excess of £16.3 billion a year.
- The Road Safety Foundation’s ‘Getting back on track’ report puts the societal cost of road traffic crashes at £35 billion in 2017. This equates to more than we spend every year on GP services and primary schools in combination.