Evaluating a trucking risk today remains centered on safety programs, accident investigation, vehicle maintenance, driver qualifications and, of course, loss history. One area that is becoming more important to the trucking industry and may provide greater insight into risk acceptability is the use and effectiveness of Fleet Telematics Technology.
What is Fleet Telematics?
Fleet Telematics is a broad term that encompasses the collection and exchange of information/data from a vehicle to a central repository. It includes vehicle technologies, road transportation, road safety, electrical engineering (sensors, wireless communication), and computer science (internet, media, etc.). The use of telematics is intended to improve safety of both the driver and others on the road. To be an effective tool, one that is not be tampered with, it is important for employees to understand that monitoring is not intended as a trigger for punitive action.
Examples of Telematics Features
Vehicle maintenance and diagnostics: vehicle sensors can deliver alerts about engine problems and other diagnostic issues
Satellite navigation: the technology of using a GPS and electronic mapping tool to enable the driver of a vehicle to locate a position, plan a route, and navigate a journey
Wireless vehicle safety communications: exchanging safety information about road hazards, speeds of other vehicles in traffic, and accidents over short range radio links
Cellphone applications: can block use while a vehicle is in motion
Emergency warning systems
Safety analytics: helps managers identify which drivers are practicing safe driving habits and which drivers need additional training
Geo-fencing: can ensure that fleet drivers keep to selected areas and routes which are chosen for their efficiency. If a driver veers off the route, the fleet manager will be alerted
Locate a lost or stolen vehicle, trailer, or cargo
Onboard video cameras: gaining access to more real-time, objective evidence about the conditions surrounding a vehicle accident
From an underwriting perspective, there are still a number of implementation questions yet to be answered, such as how information will be analyzed to provide actionable insight and what regulatory restrictions may come in to play. As telematics programs mature, insurers will eventually look to leverage data to price exposures more effectively. In the interim, fleet operators that provide heightened details of their use of telematics to improve their performance in minimizing risks will likely benefit from more favorable and consistent rates.
The Underwriting Consultant Group provides in-house technical underwriting support for Old Republic Risk Management. The group is responsible for setting and communicating underwriting guidelines for the company, working closely with the Product Development and Compliance Department. The Underwriting Consulting Group is based out of the corporate offices in Brookfield, Wisconsin.