Are telematics for commercial fleets lowering insurance costs as companies hoped?
Telematics are now widely seen as a good idea, with some tracking systems monitoring hundreds of different data points and generating by-the-second updates if required.
But some companies struggle to filter and effectively interpret all this data, with some having to employ extra staff especially for this job. Moreover, if a business has telematics in its commercial fleets and doesn’t use it to help improve driver behaviour, it may be used against a company in the event of a serious accident and any subsequent investigation.
While many companies refer to considerable returns on their investment in telematics, some fleet managers remain unconvinced, according to research by telematics company Masternaut, which found that:
- 68% of business drivers would be comfortable with telematics being installed in their vehicles.
- 72% said that neither their work nor personal vehicles were fitted with a telematics device.
- 17% said their work vehicles were tracked.
- 11% said the personal vehicles they use for work are tracked.
Of those who opposed the use of the technology, the main concerns were:
- 51% - Privacy
- 14% - Not understanding how the data is used
- 18% - Not understanding the benefits of such a system
Insurers work with a range of telematics providers, and the leading vendors have developed applications that enable users to interpret the driver behaviour data generated by their systems.
Insurers are keen for driver behavioural data to be acted upon in order to reduce the number and severity of accidents. This has moved on from the traditional ‘track and trace’ and fuel-saving benefits that telematics devices were original used for.
Interpreting and reacting to this data, whether it be pro-active in improving driver risk management, or reactive in mitigating claims costs, is key to insurers who will reflect such positive actions in the premium charged.
Data can be received in any number of ways. However, fleet operators are now faced with a new problem: how to filter and act on what could be significant volumes of seemingly random and sometimes conflicting information.
While there are numerous companies who can help interpret this data, the key is to first identify the key data sets you’re looking for (this could be sudden braking and accelerating, excessive speeds, lengthy periods of driving or poor gear choice). These can then be overlaid onto set criteria such as geography, time and dates, and actual accident stats to provide more clarity of poor driving performance and therefore highlight higher risk drivers.
This overlaying and mapping allows each organisation to capture what it feels are the key areas for themselves and, in conjunction with risk advisers, they can ensure that general standards are also adhered to.
Companies should inform all drivers of the data that is being collected and why, how that data will be used, and explain that it will be deleted once they have finished with it. Failure to follow these precautionary measures could result in drivers, who feel their rights have been infringed, complaining or even taking legal action.
For further information, please contact Steve Vachre, Risk Practice on +44 (0) 161 957 8034