Norwich Union has announced plans to pilot a new-style pay-as-you-drive motor insurance.

The group is trying the new system, under which premiums are calculated based on when, where and how often motorists use their cars.

Five thousand volunteers will take part in a trial period for up to two years beginning this summer.

Customers will have a “black box” installed in their car which will collect data on when and where they use it, using global positioning satellites.

The information will then be relayed back to Norwich Union, who will use it to calculate a premium taking into account whether people were driving during the rush hour or off-peak, and on rural roads or in city centres.