Insurers will no longer rely on motorists to provide accurate tally of penalty points as DVLA launches 'MyLicence'
By Jessica Winch
The individual driving records of all British motorists will be put online this summer in a new database to be used by insurers.
The online licence-checking service will allow insurers to check motoring convictions and penalty points of drivers, which the insurance industry claims will reduce premiums.
But others are sceptical about the possible savings for motorists and concerned about data security.
Currently, insurers can check individual driving records through the Driver & Vehicle Licensing Agency (DVLA), a government body, but this is expensive and time-consuming.
So insurers instead ask drivers to declare their licence history and assume some drivers will either lie or make an honest mistake about the number of points on their licence.
The Association of British Insurers (ABI) said 23pc of data provided to motor insurers was incorrect.
Around 16pc of policyholders "under-declare" convictions, while around 7pc over-declare. Some mistakenly tell their insurer about expired motoring convictions, for example, meaning they pay too much for policies.
The ABI said drivers could save £15 on their premiums thanks to the licence data being available online. "It should also speed up and simplify the application process for customers who will not have to guess what motoring offences may or may not need to be disclosed," said the ABI's spokesman, Malcolm Tarling.
The project, initially known as Insurance Industry Access to Driver Data, was rebranded as MyLicence at the end of last year. All insurers, brokers and price comparison websites have been encouraged to sign up, which allows them access to the necessary information using an individual's licence number.
The data will confirm the type of licence held by the customer and how long they have held their licence, and specify any driving offences.
The ABI said seven of the top 10 motor insurers had registered for the service so far, before an expected launch on July 14.
However, Julie Daniels of the comparison site comparethemarket.com said the £15 saving was unlikely until the insurance industry fully embraced the service.
"I believe that there will be little material change in premiums until the initiative is taken up across the industry," she said.
Malcolm Maycock, director of Licence Bureau, a licence-checking company, said: "The main concern with any system has to be data security."
Individual drivers will not have access to the MyLicence system. Instead, the DVLA is developing a separate online database for consumers to check that their details are correct.
This system, called View Driver Record, is being piloted by the DVLA and is due to launch next month.
Any drivers who do not have access to the internet will be able to use a service where telephone operators will talk them through their driving information held online.
The migration of driving licence data online is part of the Government's digital agenda, which has been gradually moving services on to the internet.
The paper counterpart of a driving licence is due to be phased out by 2015 in favour of a photo-card licence.
Paper car tax discs will also be scrapped from October this year.
Motor insurance premiums: the road ahead
Car insurance premiums are expected to rise this year, with a 6pc increase expected over the next 12 months.
Motorists have enjoyed falling insurance costs for several years, with premiums falling by 24pc since the start of 2012.
Insurers have been passing on savings to customers from a crackdown on personal injury claims, while competition has also kept costs down.
But analysts at the accountancy firm Deloitte said this trend was not sustainable. The firm said it expected premiums to rise by between 3pc and 6pc over the next 12 months, and by up to 20pc over five years.
"After nearly two years of falling prices, I expect car insurance premiums to start rising in line with inflation over the next 12 months," said insurance partner James Rakow.
"The UK personal motor insurance industry returned to underwriting profitability in 2013 and reported some of the best figures since 2004.
"However, these figures were supported by the fact that insurers felt able to release claims reserves held at the previous year end and this trend cannot go on indefinitely."
The average quote for an annual comprehensive car insurance policy fell by 5.6pc to £531 in the first three months of this year, according to the AA British Insurance Premium Index, its lowest level in three years.
Source The Telegraph
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