Drivers are set to take greater control of their motor insurance and save up to one third on their premiums with the launch of “Pay As You Drive”™ insurance from Norwich Union.
- Two new policies launching to help motorists reduce their premiums
- Research shows that 67 per cent of motorists ready for innovation
Drivers are set to take greater control of their motor insurance and save up to one third on their premiums with the launch of “Pay As You Drive”™ insurance from Norwich Union.
The only insurer in the UK to offer a usage-based motor insurance policy, Norwich Union has been trialling “Pay As You Drive”™ insurance since 2004, when a pilot of 5,000 motorists was launched.
Using driving data from the pilot scheme, the UK’s largest insurer has developed “Pay As You Drive”™ insurance, the first policy to help motorists control the cost of their insurance by making informed choices about when, where and how often they use their car. Pricing for “Pay As You Drive”™ insurance begins from as little as a penny per mile.
In-car GPS devices allow Norwich Union to build the insurance policy around each individual motorist. Customers will receive monthly bills based on car usage, including time of day, type of road, and mileage, another first in motor insurance. Itemised billing will be available - much like mobile phone bills - with the premiums for each journey calculated and totalled. This transparent approach to motor insurance will help customers control their motor insurance costs in a way that’s not been possible before now.
Research shows that British motorists are ready for “Pay As You Drive”™ insurance, with 67 per cent of all drivers and nine out of 10 low mileage motorists saying they would consider “Pay As You Drive”™ insurance – a clear indication that the time is right for this ground-breaking motor insurance policy. (Source: Simpson Carpenter).
Now Norwich Union is launching “Pay As You Drive”™ insurance to suit two different customer groups, each with different pence per mile rates to suit their driving habits.
New “Pay As You Drive”™ insurance for motorists aged 24 - 65
This policy was developed directly as a result of the pilot data which showed that:
- Driving during a morning weekday rush hour is 50 per cent more likely to result in an accident than driving at weekends or in the evening
- Serious accidents are more likely to occur at night
- Motorway driving is up to 10 times safer than driving on low speed urban roads
(Source: Norwich Union and Dept. for Transport statistics)
For the 48 per cent of customers who don’t use their car to drive to work in the morning rush hour, this represents a great opportunity to save on their insurance and take advantage of the other benefits of “Pay As You Drive”™ insurance. Costs for off-peak motorway driving are from 1p per mile, while costs for off-peak urban driving are from 4p per mile.
New “Pay As You Drive”™ insurance for young drivers aged 18 - 23
Young drivers face high premiums due to the nature and frequency of accidents. Research by Norwich Union, the government and the ABI has shown that compared with other motorists, young drivers:
- Account for 45 per cent of fatalities on the road between 11pm and 6am
- Are 10 times more likely to have an accident at night and this rises to 14 times more likely on weekend nights
- Are 56 per cent more likely to suffer an injury between the hours of 1am and 5am
(Source: Norwich Union, ABI and Dept. for Transport statistics)
As a result, Norwich Union is launching “Pay As You Drive”™ insurance for young drivers, designed specifically for drivers aged 18–23, with many new benefits. This policy aims to reduce young drivers’ insurance premiums and the number of road accidents and casualties at night.
To encourage young drivers to leave their vehicles at home, policyholders will be charged a pound per mile driven during the high-risk accident time between 11pm and 6am. Off-peak driving prices start from as little as 5p per mile. They will also benefit from 100 free off-peak miles every month.
The “Pay As You Drive”™ insurance for Young Drivers pilot launched by Norwich Union in January 2005 saw the number of accidents among young drivers drop by a massive 20 per cent, proof that this type of insurance policy can actually save lives.
What’s more, motorists already subscribed to “Pay As You Drive”™ insurance have saved an average of a third on their motor premiums.
Norwich Union expects to reduce young drivers’ insurance premiums and the number of road accidents with the launch of “Pay As You Drive”™ insurance for young drivers.
Iain Napier, director of “Pay As You Drive”™ insurance, said: “The launch of “Pay As You Drive”™ insurance will give motorists access to insurance that’s specifically tailored to them and their driving habits, potentially rewarding them with cheaper premiums.
“We’re confident that “Pay As You Drive”™ insurance is simply a fairer way of calculating premiums and gives customers greater control, flexibility and choice. That’s why we expect the first ever “Pay As You Drive”™ insurance proposition in the UK to be a huge success with motorists.”
Kay Martin, head of “Pay As You Drive”™ insurance, added: ““Pay As You Drive”™ insurance provides an innovative solution for young drivers while also appealing to a broad range of motorists who see the benefits of paying for insurance based on actual vehicle usage. The future of insurance is tailored products to suit people’s lifestyle and the launch of “Pay As You Drive”™ insurance is the first step in this direction.”
Motorists can log on to www.payasyoudriveinsurance.co.uk and use the online calculator to find out how much they could save with “Pay As You Drive™” insurance.
-ends-
For more information on “Pay As You Drive”™ insurance, including details of the guide, B roll, case studies and/or photography, please contact:
Emilie Lien at Lexis PR, 020 7908 6421 / 07956 106 987, elien@lexispr.com
Joanna Pritchard at Lexis PR, 020 7908 6440 / jpritchard@lexispr.com
Erik Nelson, Norwich Union Press Office, 01603 682 264 erik.nelson@norwich-union.co.uk
Notes to editors
About ‘Pay As You Drive’™ insurance
- Norwich Union Insurance Limited is licensed under European patent application numbers 97904096.1 and 01303501.9. Licensed from Progressive Casualty Insurance Company, USA and is proprietor of European patent (UK) number 0700009.
- Progressive (NYSE:PGR), with headquarters in Mayfield Village, Ohio, is the fourth largest motor insurance company in the US. In business since 1937, the company provides all drivers in 48 US states and the District of Columbia with competitive rates and 24 hour, in-person and online services.
About Norwich Union
- Norwich Union is the UK’s largest general insurer with a market share of around 14%, with a focus on insurance for individuals and small businesses.
- It is a leading provider of life, pensions and investment products and one of the largest Financial Adviser (FA) providers. FAs provide over 70% of the company's long-term savings business in the UK.
- Norwich Union’s news releases and a selection of images are available from Aviva's internet press centre at www.aviva.com/media