Younger consumers in the UK are more likely to have pay-as-you-go (PAYG) or usage-based car insurance policies, with 14.4% of those aged 18 to 24 having these types of policies compared to 2.8% of those aged 25 and over. However, premiums for younger drivers are rising, and telematics providers are offering less competitive rates.

The latest Consumer Intelligence Car Insurance Price Index shows a 10.5% decrease in quoted premiums in the UK overall, but premiums for drivers under 25 have increased by 3% in Q2 2025. Drivers aged 17 to 19 are experiencing the sharpest premium increases, and telematics providers are less willing to offer competitive rates to this group.

Despite facing rising premiums, younger drivers in the UK are more open to engaging with telematics technology. Insurers should continue to invest in telematics propositions tailored to this group to improve risk assessment, strengthen brand loyalty, and capture long-term value as younger drivers’ insurance needs evolve.

Younger drivers are a key audience for telematics and usage-based insurance, despite challenges with affordability and pricing competitiveness. Their willingness to adopt new insurance models presents an opportunity for insurers to adapt their offerings and build stronger, long-term relationships with this segment.

Read more at Yahoo Finance: Younger drivers show stronger engagement with telematics and usage-based insurance