Norwich Union to test pay as you drive insurance technology

Norwich Union to test pay as you drive insurance technology

The UK's Norwich Union has signed up IBM and Orange to provide the technology and telecommunications for a novel 'pay as you drive' insurance programme.

Under an agreement signed last year with US insurer Progressive, Norwich Union will collect real-time vehicle data using a 'black-box' device installed in customers' vehicles. This will allow monthly insurance payments to be calculated based on how often, when and where a customer's vehicle is actually used.

IBM has been chosen to provide the telematic architecture, hardware and software, and device specifications for the Norwich Union pilot, while the Orange mobile phone network will be used for data transmission.

Bill Pieroni, general manager for IBM global insurance industry, says: "We want to help determine whether this on-demand approach to insurance coupled with IBM services and infrastructure can benefit the insurance industry and motorists with more accurate insurance premiums based on actual vehicle usage."

Pay as you drive is due to be piloted this year with 5000 volunteer motorists. The pilot will last up to two years.

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