New EU data protection rules could push up the cost of telematics-based insurance, which rewards safer drivers and tailors policies to suit their individual circumstances.
Association of British Insurers chair, Paul Evans, has warned that ‘the industry will have to take great care to ensure we're not creating sectors of society that can't afford to buy insurance’. Young drivers, who face high premiums, can benefit substantially from having the necessary ‘black boxes’ installed.
Last week, European industry federation Insurance Europe expressed fears that current proposals being considered in Brussels would enable drivers to insist on the removal of their personal data, including telematics records, from insurers’ databases.
The result could be higher premiums for conscientious policyholders, warned Mr Evans, who is group chief executive of AXA Insurance.
He also claimed it would be harder for insurers to fight fraud, which currently accounts for around 10% of all claims, because they would be denied access to the kind of data needed to identify the unscrupulous.
He suggested the UK industry should now consider setting up its own code of conduct on the responsible use of data.