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Norwich Union Direct the UK's largest motor insurance provider as announced it's new innovative "Pay As You Drive" cover, offering motorists the ability to reduce their insurance premiums.

Offering two new policies , the basis of which are usage-based insurance premiums, Norwich Union is finally offering cover after its initial pilot scheme, involving 5,000 motorists, was launched in 2004.

Norwich Union's researched showed that over two thirds of the UK motorists are likely to welcome the initiative by which average savings are expected to be around 33%.

With the use of in-car GPS monitoring devices the UK's largest car insurance provider is able to tailor make unique car insurance policies specific to the policy holder - premiums being based on usage.A completely transparent itemised billing system should allow drivers to finely tune there policies, yet remaining flexible.

Premiums will be based not merely on mileage but also on other factors such as when,where and how often the policy holder drives. Premiums can even be identified to each journey.

Offering two distinct policies: 18-23 and 24-65 year old drivers Norwich Union is efficiently using its huge databank of claims histories to pass on potential savings to the more discerned driver.

Using a combination of Norwich Unions own data together with statistics supplied by ABI and the department of Transport the pilot scheme revealed :-

18-24 year old drivers are at great risk during the early hours with this group accounting for 46% of fatalities on the road between 11pm and 6am, and are 56% more likely to suffer injury between 1am and 5am.

This group is 10 times more likely to have an accident at night and this rises to 14 times more likely on weekend nights. Premiums will reflect these high risk periods and it is hoped will encourage young drivers to refrain from driving during these periods.The pilot scheme revealed a 20% drop in accidents involving young drivers and strenghtens the belief this type of policy will save lives. Norwich Union is hoping the introduction of this scheme will dramatically reduce the number of accidents involving young drivers.

In the other group - the 24-65 year old drivers, the pilot revealed that this group was 50% more likely to suffer an accident during the morning weekday rush hour than driving at weekends or in the evenings. Serious accidents are most likely to happen at night and that motorway driving was up to 10 times safer than low speed urban roads.

These statistics are encouraging to the 48% of Norwich Union customers who dont use their vehicle to drive to work during the weekeday peak periods.

Iain Napier, director of *Pay As You Drive** insurance, said: *The launch of *Pay As You Drive** insurance will give motorists access to insurance that's specifically tailored to them and their driving habits, potentially rewarding them with cheaper premiums.

*We*re confident that *Pay As You Drive** insurance is simply a fairer way of calculating premiums and gives customers greater control, flexibility and choice. That's why we expect the first ever *Pay As You Drive** insurance proposition in the UK to be a huge success with motorists.*

Kay Martin, head of *Pay As You Drive** insurance, added: **Pay As You Drive** insurance provides an innovative solution for young drivers while also appealing to a broad range of motorists who see the benefits of paying for insurance based on actual vehicle usage. The future of insurance is tailored products to suit people's lifestyle and the launch of *Pay As You Drive** insurance is the first step in this direction.*

Overall it is likely this type of policy will be well received by UK motorists, especially in view of the transparent billing system, enabling policy holders to make informed decisions as to how and when to use their vehicles.