Insurance premiums could be slashed if modern, interactive technology was used to swap data between cars and insurers replacing 'archaic' systems currently employed to set payments.
Coverbox, a pay-as-you-drive insurance provider, believes multi-billion pound savings could be achieved by the adoption of readily available technology that exchanges information between vehicles and insurers on a mile-by-mile basis.
The company provides insurance that's based on a 'pay-as-you-drive' model, where the price of cover varies by the mile; according to the time of the day or night and how the driver drives.
Policyholders get a personal website allowing them to see how many miles they've driven, and what the cost is. This enables the driver to modify their on-road behaviour, drive in a safer manner, or at less risky times, and save money.
Coverbox's deputy chairman, Johan van der Merwe, said: 'Peoples driving behaviour is normally improved if they know theyre being monitored by cameras, or police officers; that means fewer accidents. Telematics enables driving behaviour to be observed and recorded, and it allows insurers to reward drivers with lowered insurance costs if they drive in a low-risk environment.
'Massively-advanced interactive devices are available now which can enable new levels of data provision from vehicles to which they are fitted as part of pay-how-you-drive insurance products.'
Coverbox is currently piloting equipment with the potential of incorporating 'black box'-style video recording of the motorist's driving behaviour.
The company has commissioned a report into the use of telematics devices, which will be presented to a panel of leading insurance providers in the near future.