Pay as you drive insurance withdrawn by Norwich Union

Mon, 23 Jun 2008

Norwich Union has recently announced that it is withdrawing its Pay as you Drive scheme.

An analyst from consultancy Watson Wyatt has said that pay as you drive schemes may have been ahead of their time and will eventually come back in a few years. "I wouldn't write off usage-based motor insurance entirely. This is a heavy blow for the pay-as-you-drive insurance concept, but it may eventually recover," said James Tanser, a Watson Wyatt analyst.

The Pay as you Drive policy has been taken of the market because there was not enough consumer interest, say Norwich Union although usage-based insurance, called Drive Time, is still available from Royal and Sun Alliance .

However, Watson Wyatt believe that with the increasing technology that is being put into cars, as well as environmental issues and future government initiatives on road pricing, usage-based insurance will become more acceptable and attractive to drivers .
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