People want cheaper car insurance, but also want to retain privacy. Here’s some feedback from IMS;
Insurers must reassess their approach to data privacy or risk seeing their personalised pricing initiatives stall in 2026, leading telematics provider IMS has warned.
Despite its potential to deliver significant cost savings to customers, adoption of Usage-Based Insurance (UBI) and personalised pricing in the UK continues to lag, largely due to persistent consumer privacy concerns, according to research from IMS.
Andrew Brown-Allan, EVP Growth (EMEA) at IMS, said: “The industry is sitting on a wealth of data from the last decade that proves the value of risk-predictive driving scores derived from telematics data, and all the elements are there for UBI and personalised pricing to completely rewrite how motor insurance works for customers. But, as yet, the sector has failed to tackle a major barrier to uptake, namely consumer concerns around their data and privacy.”
The global telematics and connected insurance solutions provider surveyed more than 5,000 drivers across five international markets. The findings suggest that while 72% of UK motorists are open to the concept of UBI in principle, over half remain hesitant or unwilling to share driving data, citing fears around data misuse, security breaches and a general lack of transparency.
Brown-Allan added: “The market has reached a point where the technology is mature, cost-effective and the benefits are demonstrable, yet uptake is still constrained by a trust gap. Consumers increasingly expect personalised products, but they also expect clarity and control over their data. Right now, many feel that trade-off isn’t balanced in their favour. And too many insurers that offer telematics-based policies leave the things that clearly matter to consumers relegated to the small print.”
TECH CAN HELP REDUCE ROAD ACCIDENTS
IMS’s call comes following the Government’s launch of its new road safety strategy (6 January) which aims to reduce deaths and serious injuries on Britain’s roads by 65% by 2035. Brown-Allan said the aim is ‘laudable’ but the strategy lacks focus on telematics, which has a proven track record in reducing accident numbers.
He said: “Telematics technology delivered via smartphones, has reduced accidents, improved driving behaviour, and led to a reduction in insurance premiums for young drivers.
“Our telematics data shows that between 2018-2022, the number of 17–19-year-old drivers who have been killed or seriously injured in road traffic accidents (RTAs) fell from 10,508 in 2018 to 6575 in 2021, a 37% drop in three years, compared to a 1% increase in numbers killed or seriously injured among the motorists as a whole, and we see a strong correlation with UBI take up among young drivers.
“To continue this welcome trend the government must incentivise adoption, by reducing or removing highly regressive insurance premium tax for youngsters using telematics, and to directly encourage the insurance industry to market these life- saving products more aggressively to young drivers (and older citizens too for that matter).”
UBI policies use smartphone apps or in-vehicle technology to assess driving behaviour such as speed, braking, mileage, and time of travel. This data allows for more accurate risk pricing and, in some cases, unlock savings of over £1,100 per year. Yet the penetration rate in the UK remains relatively low, with just 19% of drivers having ever used a UBI product.
Key UK findings from the IMS report include:
- 62% of respondents are concerned about sharing personal driving data
- Only 32% are comfortable with insurers collecting telematics data
- Privacy fears, including tracking and data misuse, remain the top deterrents
“Insurers must treat data access as a privilege, not a given,” Brown-Allan said. “This means being transparent, secure, and giving customers real control. Without that, UBI risks remaining a niche proposition despite its economic and safety benefits.”
As the motor insurance sector continues to grapple with cost pressures, changing driving behaviours, and demand for personalised products, the report suggests that building consumer trust will be pivotal to realising the full potential of usage-based models.
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