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Insurer to Provide Tailored 'Pay As You Drive'(TM) Insurance Premiums For Young Drivers

NORWICH, England, January 12 --

Young drivers will now have the chance to get more affordable insurance premiums thanks to an innovative new scheme from Norwich Union.

The UK's largest insurer has launched 'Pay As You Drive'(TM) (1) For Young Drivers for motorists aged 18-21, which uses cutting-edge, in-car technology to calculate their premiums based on when and how often they drive their car.

The 'black box' style device is fitted discreetly into the car and uses Global Positioning Satellite (GPS) technology to record the journeys of the car. This information is then transmitted securely to Norwich Union via a mobile phone network.

The premiums will be calculated in a similar way to mobile phone tariffs. Drivers will be able to control their premiums to more affordable levels by driving mainly during 'off peak' times between the hours of 6am and 11pm rather than driving during 'peak' times between 11pm and 6am.

These tariffs have been calculated based on accident statistics for the 18-21 age bracket, (2) which show these motorists are at much greater risk of being killed or seriously injured in car accidents between the hours of 11pm and 6am.

By reflecting the time of day in the cost, this innovative test product not only makes insurance premiums more affordable, but it deters younger motorists from driving at night when the conditions are less safe.

Features of the Pay As You Drive'(TM) For Young Drivers product include:

- a tariff per mile, with the rate personalised to each customer and dependent on the time of day the car is driven

- the first 100 off peak miles each month are free

- young drivers could see a saving of up to 30% a year off the cost of their premiums

- premiums are billed monthly - premiums will vary monthly if customers vary their driving

- there is a one-off fee of GBP199 for the telematic device - this is expected to cost less than the savings to be made in premiums.

- the box has a built in car locator - enabling customers to have their car located if there's been an accident, breakdown or if it has been stolen

In August, Norwich Union launched a nationwide pilot scheme of 'Pay As You Drive' (TM) insurance amongst 5000 volunteers of all age ranges to investigate driving patterns and help set premium pricing.

Norwich Union is now able to launch this product for young drivers because the pricing can already be calculated for these motorists as the time of day is such a major factor for this age group. The first 1500 boxes are ready to be fitted in customers' cars.

The recently published independent Greenaway report into uninsured driving in the UK described 'Pay As You Drive'(TM) as a 'potentially helpful innovation' by setting rates for late-night driving at a high enough level to encourage young drivers not to use their vehicle at this time.

Robert Ledger, programme director for the 'Pay As You Drive'(TM) insurance scheme said: "The scheme brings motor insurance into the 21st century by providing affordable comprehensive insurance for young drivers in return for driving at safer times.

"There's no getting away from it, Government statistics (1) show that this age group are more likely to be killed or injured in road accidents between the hours of 11pm and 6am - and this has been factored into tariffs for this product.

"Although the money-saving factor will probably be the main appeal for young drivers, I imagine the road safety aspect will appeal to their parents.

"Although this product may not suit all young drivers, we feel it does offer them an alternative to the standard motor insurance that is currently available. And by having their own insurance policy rather than being a named driver on their parents' policy, young drivers will be able to build up their own no claims discount, making insurance even cheaper in the future."

Norwich Union - the UK's largest insurer - has an exclusive agreement with US insurer Progressive to pioneer 'Pay As You Drive'(TM) insurance in the UK and Europe using telematics technology.

Young motorists or parents who want their children to sign up to be one of the 1,500 motorists on the 'Pay As You Drive'(TM) For Young Drivers test product can visit www.payasyoudriveinsurance.co.uk (3) or contact the 'Pay As You Drive'(TM) insurance team at payasyoudrive@norwich-union.co.uk.

Notes to Editors:

About 'Pay As You Drive'(TM) insurance

(1) Norwich Union Insurance Limited is licensed under European patent application no.s 97904096.1 and 01303501.9. Licensed from Progressive Casualty Insurance Company, USA and is proprietor of European patent (UK) no. 0700009.

Progressive , with headquarters in Mayfield Village, Ohio, is the fourth largest motor insurance company in the US. In business since 1937, the company provides all drivers in 48 US states and the District of Columbia with competitive rates and 24 hour, in-person and online services.

(2) Statistics from the Department for Transport have shown that people aged between 18 and 21 are more likely to have accidents between 11 in the evening and 6am - with a greater risk of serious injury or fatality. At the same time fewer accidents happen during the day between the hours of 6am and 11pm.

(3) Website accessible from 7am on Wednesday 12th January 2005

Norwich Union Direct' 'Pay As You Drive'(TM) insurance policy is a comprehensive motor cover. The driver is charged a small fixed monthly payment which protects the vehicle against damage and theft when stationery.

In addition to the fixed payment the motorist will be charged a personalised tariff for every mile recorded during the Off-peak time zone (11am-6pm) as well as a flat rate of GBP1 per mile, during the Peak time (11.01pm to 5.59am).The device costs from GBP199.

IBM and Orange have partnered with Norwich Union to deliver the 'Pay As You Drive'(TM) insurance technology.

Further information and PAYD imagery is available by calling: Charlotte Speedy, Matt Buchanan or Charlotte Ruddlesdin at QBO Bell Pottinger on +44-207-861-2424 or +44-7976-251-409. Louise Zucchi at Norwich Union Press Office on +44-1603-684-506 or +44-7800-699-664