Insurance and Location Intelligence: Partners in Safety and Performance
Commercial insurance companies work with telematics providers to help customers improve employee safety and performance, and reduce costs along the way.
In February of 2012, Travelers Insurance announced its Intellidrive® Fleet Safety Solutions program in an effort to help business owners use the latest fleet telematics technology – including SaaS fleet management solutions from Telogis – to implement effective fleet safety programs that help reduce auto risks, keep employees safe and reduce operating costs for their businesses. In its announcement, Travelers shared a staggering statistic from the National Safety Council Injury Facts 2011 Edition:
“…the medical and indemnity costs from motor vehicle claims in 2007 and 2008 averaged $65,875, well above the $40,043 which makes up the next highest claim cost of slips and falls..”
Two of the first questions every business should ask at the end of the day are “did we perform our work safely, and did we do it efficiently with respect to our resources (the bottom line)?” The statistic quoted above would indicate that safety and the bottom line are intertwined. Telematics helps answer both of these questions — and insurance companies like Travelers are using the technology to work with customers to coach them on safer driving habits and improve their business as a whole. A few ways in which telematics improves employee and asset safety while also lowering operating costs:
- Reduction of work injury claims through coaching and more effective use
- Reduced replacement costs associated with replacing vehicles damaged in accidents
- Reducing unauthorized use that can lead to damages and loss of an asset
- Retrieval of stolen assets
- Potentially lower insurance premiums
The Marriage of Performance and Safety
The goal of any telematics solution is to help fleets improve operational efficiencies, reduce labor and maintenance costs, run greener, use less fuel, improve asset utilization, etc. Many of the key factors used to monitor those elements also directly affect safety. Speeding, harsh braking and jackrabbit starts are all detrimental to fuel use and vehicle performance — those same factors also indicate unsafe driving.
“We’re in a position where we can help to educate our customers on taking this information and using it for safety,” says Chris Hayes, director of transportation services, Travelers Risk Control. “We provide support for them on ways to take information out of telematics devices and turn that into a coachable moment between a manager and a driver, and give management a clear understanding of not only the unsafe things that might be happening on the road, but also discover things that the driver is doing right and to reward them accordingly.”
A few of the key factors monitored by Telogis Fleet that Travelers finds important are hard braking, hard acceleration, excessive speeding, speeding vs. posted speed limit, after-hours use and seat belt use. After-hours use is particularly notable because it exposes your people and assets to unnecessary risk. Seat belt use is also viewed upon as a critical measurement.
“Seat belt use can have a strong correlation to loss,” says Hayes. “People who don’t put on their seat belt also tend to take more risks. We also know that motor vehicle accidents are the largest source of workplace fatalities and have the costliest workplace injuries. So use of seat belts can have a substantial impact on the employee driver’s ability to survive a motor vehicle accident.”
Travelers stresses the importance of working with your employees to understand that this is not a method to crack down or monitor their performance, but that it is designed to assist and protect them in all facets of their work.
“It’s important to work with the individual drivers to help them understand how telematics can benefit them,” says Beth Tirone, senior director, product development, Travelers Insurance. “It can work to their advantage in identifying, for example, that they weren’t actually at a location where someone claimed they were hit by their vehicle, or that they weren’t speeding or driving dangerously. Their safety and the safety of your company’s assets are the ultimate reason for implementing these programs.”
Serving Fleets of All Sizes
Insurance companies have taken two distinct approaches to telematics. Some providers collect the data directly from their customers’ fleets and analyze it internally to tailor policies specific to each fleet. Others, like Travelers, rely on telematics as a symbol of effective fleet management and responsibility. The company works with customers to identify and understand areas in need of improvement within their fleet and provide guidance on effective driver feedback and coaching. While a telematics system alone may not be grounds for a discounted rate, using the technology to effectively coach and monitor drivers may lead to lower policy costs. For Travelers, this service applies to small, medium and large fleets serving a wide range of businesses, from automobiles used for sales calls to box trucks used for delivery services, and large trucks used in construction and long haul.
“The fleets that we see adopting earliest are the ones that are running large commercial vehicles because of the range of information that’s available to them,” says Hayes. “As the face of telematics changes and becomes even more accessible to fleets of all sizes, the face of the customer who uses telematics will change as well. It will go from being mostly larger fleets to any fleet interested in improving its safety.”
To Hayes’ point, scalable telematics solutions – such as Telogis Fleet – are ensuring that telematics is accessible to fleets of all shapes and sizes. He also points out that smaller businesses, with only a few vehicles, may have the most to lose, and thereby the most to gain from mixing telematics and insurance.
“They probably consider their general liability risk or their property risk to be what they are insuring against and don’t have fleet safety as a main concern,” says Hayes. “When you look at what’s really going on to cause a significant loss, it’s going to be a motor vehicle accident or a workers compensation loss associated with a motor vehicle accident. So helping those smaller fleets develop a stronger safety program is really important.”