Dutch navigation systems maker TomTom is moving into the insurance market by providing technology to insurance companies that can track drivers' safety records and can be used to base premiums on driving behaviour.

TomTom, which made its name with its personal navigation devices (PND) used in cars and trucks, said today that it teamed up with UK-based insurance firm Motaquote to offer its first new insurance product, called Fair Play, which gives the safest drivers lower premiums.

"Our entry in the insurance market with our proven fleet management technology puts us at the forefront of a move that could help to revolutionise the motor insurance industry," said Thomas Schmidt, managing director TomTom Business Solutions.

The scheme gives drivers control over their own policy by using driving ability and behaviour to allocate premiums, rather than risk factors used by insurers such as postcode, gender, and age or vehicle, Mr Schmidt told Reuters.

"Drivers using the insurance product will have a TomTom tracking unit fitted in their vehicles, allowing driver behaviour and habits to be monitored by insurers and by improving driving style, you can drive down your premiums," he said.

TomTom faces intense competition in its core market as consumers increasingly opt for free or cheap navigation software as well as gadgets like smartphones and tablet computers.

It is now targeting higher-growth areas and new markets.

The firm increasingly sells navigation devices built into car and truck dashboards, rather than the standalone versions, and sells mapping data and real-time traffic services through smartphone apps and other devices.

The new move into the consumer insurance market, announced today, will focus on growth in Europe in 2012, Mr Schmidt said.

TomTom, whose founders have a majority stake in the company, competes in the PND  market with Garmin and in the commercial digital map market with Google and Nokia.

Reuters