CAR INSURANCE

Thousands of motorists are road-testing a new pay-as-you-drive insurance scheme. Up to 5,000 Norwich Union policyholders are having their cars fitted with a "black box" which tracks every completed journey they make. The technology, similar to that used in mobile phones, will allow the insurer to bill motorists for each mile driven.

The two-year pilot scheme could help cut premiums for occasional car users, but may mean more expensive car insurance for high-mileage drivers. The black box is smaller in size than a DVD case and is installed either in the boot or passenger area of a policyholder's car.

The box records real-time vehicle usage and sends the data to Norwich Union securely using mobile technology. A monthly insurance bill will then be sent to the policyholder based on an agreed insurance cost per mile. The cost per mile will be based on a number of factors - such as insurance history, the age and sex of the policyholder as well as how the vehicle is being used.

Robert Ledger, director of the pay-as-you-drive scheme, said, "The interest in the pilot scheme has been phenomenal. We could have filled the pilot twice over with the amount of requests we've had from interested motorists, not just within the UK but from drivers around the world."

Progressive Insurance, the USA's fourth largest car insurer, has already piloted a pay-as-you-drive scheme across the Atlantic. Norwich Union, the UK's largest car insurer, has exclusive rights to market the technology in UK and Europe. If the pilot is successful the technology may become available to other Norwich Union customers.

The EU Gender Directive which would have made car insurance more expensive for most women drivers in the UK has been dropped by the European Commission. Deputy Minister for Women and Equality Jacqui Smith said, "The rights we've enjoyed in the UK for nearly 30 years will now be enshrined in this directive for the benefit of all Europeans.

This achievement shows how Europe can develop solutions that are good for us all. It's good news on insurance, but this directive covers much more than that." The directive will give equal rights to people in all of the EU's 25 member states.

Sex discrimination is already illegal in the UK under the 1975 Sex Discrimination Act. As well as insurance, the directive will ensure equal treatment in a range of other goods and services. This includes banking and pensions, as well as insurance and housing, including rented accommodation and hotels.

Ms Smith added, "It means that pregnant women in any member state should not be disadvantaged from getting mortgages because they are pregnant. It also means that married women should be free to get credit without a requirement for their husbands to be guarantors, and that part time workers should be able to apply for loans."