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Tesco Bank Enters Usage-Based Insurance Sector

The U.K. bank has introduced a telematics-powered usage-based insurance program targeted at young drivers.

In the U.K., young drivers face nearly oppressive auto insurance rates, which is discouraging some from taking up driving at all. Telematics is viewed as a way to mitigate that challenge, by allowing the best young drivers to affect their insurance premium positively by adopting good driving habits.

Tesco Bank, a London-based provider of what it calls "simple personal banking products, principally credit cards, personal loans, savings and general insurance," is the latest entrant into the young driver-focused usage-based insurance market with the launch of Tesco Bank Box Insurance.

The insurance product, which is "arranged and administered by Insure The Box Limited and is underwritten by Catlin Insurance Company and Great Lakes Reinsurance," requires drivers to fit a box into their car which monitors their driving habits -- adjusting premiums accordingly -- and sends regular feedback.

[The many stakeholders of usage-based insurance]

"Sitting behind the wheel of a car in those first few years of driving is exciting but also daunting and we want to help young drivers, and their parents, make it as safe as possible," says Karl Bedlow, managing director of insurance at Tesco, in a statement. "The launch of Tesco Bank Box Insurance will not only help increase the safety of our younger policy holders, but also provide the same value and quality which they and their families have come to expect from Tesco Bank insurance."

Other companies that offer a similar product include Ingenie and Aviva.

[What the Association of British Insurers says about sharing telematics data]

Nathan Golia is senior editor of Insurance & Technology. He joined the publication in 2010 as associate editor and covers all aspects of the nexus between insurance and information technology, including mobility, distribution, core systems, customer interaction, and risk ... View Full Bio

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