Personalised pricing uptake to flatline in 2026 unless UK-based insurers address privacy concerns

Why is UK Usage-based Insurance (UBI) adoption still low?

Usage-Based Insurance (UBI) has the potential to deliver significant cost savings to customers. However, adoption of UBI and personalised pricing in the UK continues to lag. This is largely due to persistent consumer privacy concerns, according to research from IMS.

Brown-Allan, EVP Growth (EMEA) at IMS, said: “The industry is sitting on a wealth of data from the last decade. This data proves the value of risk-predictive driving scores derived from telematics data. All the elements are there for UBI and personalised pricing to completely rewrite how motor insurance works. Yet, the sector has failed to tackle a major barrier to uptake. Namely, consumer concerns around their data and privacy.”

What do UK Drivers think about sharing their driving data?

The global telematics and connected insurance solutions provider (IMS) 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 Usage-based Insurance (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.”

Can Telematics data (UBI) help achieve UK Road Safety Goals?

IMS’ 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 novice 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 policies with embedded 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).”

What are the benefits and current penetration of Connected Insurance/ Usage-based Insurance?

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:

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.”

Is the UK Insurance Industry doing enough to promote Usage-based Insurance (UBI) programs?

The motor insurance sector continues to grapple with cost pressures, changing driving behaviours, and demand for personalised products. Accordingly, the report suggests that building consumer trust will be pivotal. This trust is essential to realising the full potential of usage-based models.

The research also found that the sector is failing to make these alternatives sufficiently visible to consumers: 

• Over 50% of respondents were unfamiliar with usage-based insurance products 

• In the UK, only 45% of drivers had even heard of UBI 

• Just 19% had ever taken out a UBI policy 

• Two-thirds of UK drivers were not offered a usage-based option at their last renewal