Trafficmaster, a company specializing in the provision of car navigation technology, has signed a contract with Norwich Union to supply a further 35,000 telematics "black boxes" for a "pay as you drive" insurance scheme.

This extends the contract the UK insurance firm signed with Trafficmaster last year to provide additional boxes for its Telematics program. The boxes record time, distance, and location of a vehicle’s journeys.

Norwich Union is conducting a pilot to investigate motorists’ preference for a usage-based motor insurance product. The ongoing ‘Pay As You Drive’ and Fleet Telematics pilots launched in 2004 and 2005 have provided insight into vehicle usage and driving behavior, and an accurate risk assessment tool.

Norwich Union’s chief executive, Simon Machell, said: By increasing the number of boxes in our pilot, we will have access to additional data to help ensure that any future ‘Pay As You Drive’ insurance propositions are best suited to British motorists.

The pilot recorded over 10 million journeys from its 5,000 pilot customers, with an average of 8,500 miles driven per customer. This average figure, based on one year’s worth of driving, is well below the national average of 11,000 miles per year, highlighting the potential of a usage-based insurance product which may encourage motorists to rely less on their car for short journeys.