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Surveillance fears force Norwich to scrap 'pay as you drive' car policies Kate Hughes Britain's biggest insurer Norwich Union has withdrawn one of its flagship car insurance policies less than two years after its launch. The "Pay As You Drive" scheme used satellite technology to track journeys via a black box installed in customers' cars. The data was used to offer cheaper premiums to drivers who avoided high-risk periods such as rush-hour and late at night. Norwich Union said too few customers had signed up for the policy, blaming a slow take-up rate of the technology among car-makers. "We are pausing Pay As You Drive and transferring existing policyholders on to more traditional products," said a spokesman. "The indication we had from the motor industry was that they would readily adopt telemics boxes. That would have reduced our costs. But it hasn't happened."
(Article continues below) It seems the provider also overestimated the response from consumers. In 2006, when it was launched, Norwich Union had hoped that 100,000 boxes would be installed. Today, that number is understood to be about 10,000. Concerns over the tracking capabilities were a sticking point as cars with the system were constantly tracked via satellite. Questions were raised over invasion of privacy and the use of the data generated from monitoring the movements of a registered vehicle. "The big-brother element of Pay As You Drive, particularly the ability to see how fast someone drives, put a lot of potential policyholders off," said Peter Gerrard, the head of insurance research at the price comparison site Moneysupermarket.com.
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