Azara Blog: Norwich Union drops "Pay As You Drive"

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Date published: 2008/06/15

The BBC says:

Britain's biggest insurer has suspended a flagship car insurance scheme less than two years after its roll out.

Norwich Union's "pay as you drive" policy used satellite technology to track every journey via a black box installed in customers' cars.

It resulted in cheaper premiums for people who avoided driving at high risk times like rush hour and late at night.

The company said too few customers had joined, and blamed a slow take-up rate of the technology amongst car makers.
Norwich Union had set a target of 100,000 drivers. The company would not reveal exactly how many people had signed up but said it was "not less than 10,000"
Graeme Trudgill from the British Insurance Brokers' Association thinks many drivers did not like the idea of being constantly monitored:

"The customers don't like the whole Big Brother attitude," he told the programme.

"They don't like the fact that someone is going to know exactly where they're going, at what time and at what speed as well," he added.

The suspension of "Pay as you drive" could have repercussions beyond just car insurance.

Any road pricing scheme introduced by the government is likely to use similar technology to send back data.

Edmund King, president of the AA, says the government will now no longer be able to benefit from the insurance industry piloting these systems:

"The fact that people aren't really accepting it as quickly as people thought is probably putting the government plans on the back burner."

Another good idea bites the dust. Norwich Union blaming the car makers is a bit pathetic. Their business model was obviously woefully optimistic. On the other hand, they were just ahead of the times, and some day this idea will come back.

The claim that this will have any impact on the government introduction of road pricing is fanciful. The big difference between the government and Norwich Union is of course that the government can force everyone to use this technology whether they like it or not.

Interestingly the media has just been spinning the government line that the majority of people in the country support the ability of the government to lock up people for 42 days (well, or no doubt any arbitrarily long period) without any judicial oversight. So it would seem that if you can spin loss of civil liberties as the only way to "defeat" the terrorists then the majority of people will follow like sheep, whereas with permanent tracking of people's movements the government has not yet found a way to scare people into submission, althougn perhaps they will soon enough link this with fighting terrorism as well.

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