Category: Telematics · Reviewed by Jake Leat, Associate Director · Last reviewed 2026-06-10
The FCA Consumer Duty applied to telematics motor insurance is the practical operationalisation of Principle 12 — and the cross-cutting rules and four outcomes set out in PS22/9 — in the design, sale and ongoing operation of telematics-based motor products, including pay-as-you-drive, pay-how-you-drive and hybrid black-box policies.
Category: Telematics Aliases: Consumer Duty telematics, PS22/9 telematics, telematics fair value, telematics consumer understanding Established: Consumer Duty effective 31 July 2023 (new and existing products); FCA PS22/9 July 2022 Related: Consumer Duty, Telematics insurance / UBI, Driver scoring, General Insurance Pricing Practices
The Consumer Duty introduced Principle 12 (“a firm must act to deliver good outcomes for retail customers”), three cross-cutting rules (act in good faith; avoid foreseeable harm; enable and support customers to pursue their financial objectives), and four outcomes (products and services; price and value; consumer understanding; consumer support). Applied to telematics motor insurance — a product class with high target-market concentration in younger and lower-income drivers, complex pricing mechanics and material mid-term contractual triggers — these obligations have specific practical content.
The Duty is set out in FCA Policy Statement PS22/9 (July 2022) and operationalised through PRIN 2A in the FCA Handbook. It applies in addition to existing ICOBS, PROD 4 and PRIN rules; it does not displace them.
PROD 4.2 already required identification of a target market and a distribution strategy. Under Consumer Duty, manufacturers must additionally consider foreseeable harms — in telematics, the principal harm vectors are mid-term cancellation (and the policyholder’s inability to obtain replacement cover), opaque score-driven price changes, and curfew breach charges that compound during a single billing period. Manufacturers should test that the product remains appropriate for the target market over time, not solely at distribution.
The price and value outcome (PRIN 2A.4) requires a fair value assessment covering the full price the customer pays. For telematics, the assessment must include: the headline premium; mid-term price adjustments triggered by score; ancillary fees (installation, fitter cancellation, device removal); curfew penalties; cancellation fees; and the value of the telematics service itself (the app, coaching features). The interaction with the General Insurance Pricing Practices remedy in PS21/5 is direct: renewal prices must not exceed equivalent new-business prices through the same channel.
PRIN 2A.5 requires communications to enable customers to make informed decisions. For telematics, that means: clearly explaining how the score works; how to access the data; what triggers a price change or cancellation; the consequences of device removal; and the customer’s data subject rights under UK GDPR. The FCA’s December 2023 multi-firm review of price and value, and its 2024 work on renewals, are relevant supervisory references.
PRIN 2A.6 requires support throughout the customer journey. In telematics, that requires accessible complaints handling for score disputes, telephone alternatives to app-only servicing for accessibility, and Article 22 human review for adverse decisions.
In practice insurers re-baselined their telematics products through 2023–2024: revising product literature, redesigning customer-facing apps, retraining customer service staff on score disputes, and updating fair value assessments to address the matters above. Brokers distributing telematics motor cover have updated their PROD 4.3 distributor information and the documentation they receive from the manufacturer.
The Financial Ombudsman Service has, over a long period of published decisions, repeatedly criticised insurers for mid-term cancellations on the back of opaque scoring or curfew triggers; under the Consumer Duty, FOS jurisprudence has hardened. Practitioners should expect the FOS to take a robust view where the foreseeable harm test or consumer understanding rule has not been observed.
The Duty applies to all retail telematics products; commercial fleet products fall outside its strict scope but Consumer Duty principles inform FCA broader fair-treatment expectations. The Duty’s annual board attestation (PRIN 2A.8.3R) requires governance evidence; firms with telematics product lines typically devote a specific chapter of the attestation to the product class.
A black-box insurer revises its cancellation triggers: a single curfew breach no longer triggers cancellation; a written warning, a 14-day grace period, a human review and an explicit notice precede any cancellation. Renewal pricing is constrained to the new-business equivalent through the same channel under PS21/5, with the fair-value assessment reviewing the score’s contribution to the premium.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-10. Next review: 2026-12-10.
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