The use of GPS technology for car insurance underwriting is faced with several problems, one analyst has claimed.

According to Martha Bennett, research director for financial services at Datamonitor, problematic issues include security, data management and the cost of supporting the apparatus, Computing reports.

In terms of pay-as-you-go insurance, GPS-based systems are used to assess premiums to be paid by insurers depending on whether cars are being taken to areas where accidents are common, however this poses questions about invasion of privacy, the analyst claims.

"Other points of debate include the right for police or government agencies to ask for such data and how long the data and how long the data should be kept if they ask for GPS records from [the] insurer," she told the news provider.

Ms Bennett went on to add providers will be influenced by the cost of running the systems and whether companies have the geodemographical apparatus in place.

Datamonitor claims to be a premium business information firm helping over 5,000 companies across the world in the automotive, energy and technology sectors among others.

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