UK Insurance agency provides pay-as-you-drive insurance

Norwich Union, one of the UK's largest insurers, has launched its pay-as-you-drive insurance using GPS tracking. It's prefect for Sunday drivers and non-commuters.

The trial has been running since 2004. Speaking to the programme manager at a Cambridge Wireless event back in the UK, then it is actually more of a marketing ploy to allow insurers to communicate with their members more frequently than once a year at renewal time.

But the interesting part is the usage and demographic data that the service provides. Here's a snapshot:

• serious accidents are more likely to occur at night
• motorway driving is up to 10 times safer than driving on local roads
• driving during the weekday morning rush hour is 50 per cent more likely to result in an accident than driving at the weekend or evening.

I am sure, this will permit tighter segmentation of users. For example, with Norwich Union, a young driver will be charged £1 per mile during the "high risk" accident period of 23:00 to 06:00 to encourage them to leave their cars at home.