FinTech UK FCA Sandbox InsurTech -- Usage-Based Insurance

FCA Regulatory Sandbox Application

FCA Sandbox allows testing innovative products with real customers under temporary authorisation -- without 12-18 month full FCA authorisation.

Application

• 1innovation case (pay-per-mile via pure smartphone telematics -- genuinely new at UK scale),
• 2consumer safeguards (insurance cover day 1, cancellation rights, complaints),
• 3test parameters (2,000 customers, 6-month period, success metrics),
• 4exit plan (full FCA ICOBS authorisation after Sandbox).

FCA Sandbox accepted

• 3-month review, 6-month test period.
• Pay-Per-

Mile Telematics Platform

iOS CoreMotion +

GPS

trip start/end detection, mileage measured to 0.1 miles.

GoCardless VRP

variable monthly billing based on miles.

Dashboard

miles driven, cost accrued, projected bill.

FCA Consumer Duty

actuarial evidence that pay-per-mile genuinely saves money for low-mileage drivers vs standard annual premium.

Analysis

34.2% average saving for drivers under 6,000 miles/year (60% of UK drivers).

MID Integration

MID (MIBI API): (1) policy inception within 24 hours (MID POST), (2) mileage-based policy -- standard MID fields, (3) policy suspension (vehicle SORN -- MID updated), (4) policy cancellation (MID DELETE within 24 hours).

DVLA ANPR enforcement

zero MID gaps -- every day uninsured is a DVLA enforcement risk for the customer.

ICO DPIA for UBI

• DPIA mandatory (Article 35 -- continuous GPS monitoring): (1) purpose limitation (location for mileage + driving score only -- not shared without consent), (2) data minimisation (GPS track stored 30 days post-trip only -- deleted after mileage billed), (3) PECR consent (explicit opt-in -- granular: mileage only vs mileage + score), (4) accuracy rights (customer can dispute mileage -- GPS track review mechanism), (5) annual DPIA review.
• High risk -- annual review required.