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How Vehicle Telematics are Helping to Cut Insurance Costs for Businesses

Andy Jenkins Operations Director Russell Scanlan 1

Telematics can be very useful in providing fleet operators with the tools for their drivers to become safer and more competent while working – but this new technology isn’t a quick fix and can take some time to embed in the culture of a business. Here, Operations Director Andy Jenkins discusses how the ‘black box’ could gradually changing the fleet insurance landscape.

 A robust telematics system will offer both in-depth and real-time insight as well as detailed reports into a driver’s driving behaviours – and so it is becoming more and more popular with fleet operators across a variety of business sectors as a way to monitor and improve driving standards, which in turn will have a positive impact on the cost of their insurance. 

The benefits of a telematics system, or the ‘black box’ as it is more commonly known, are wide ranging both for employees and employers. For example, they provide drivers with insights through a KPI reporting suite on events, such as sudden or hard breaking and where these occur, for example, which can help to highlight potential issues with specific routes and how they can be addressed. These opportunities for feedback could help make a significant difference to long-term driving performance throughout a company.

Most insurers base their premiums on driver profiling and the general statistics available from a number of sources, and more and more we are seeing telematics playing a key function. For fleet insurance (as opposed to individual insurance), telematics are comprehensive and include recording of driving styles, forward, rear and side cameras and internal temperature sensors for load temperature monitoring.

Driving style and cameras can provide irrefutable proof of circumstances before and during a motoring incident. With “Crash for Cash” becoming an increasing problem, telematics evidence can almost eradicate this risk for a fleet operator – as around 70 per cent of motor fleet premiums consist of the claims cost from attritional driving incidents. Any improvement in this area can have a profoundly positive effect on premiums.

In addition to speed and braking monitoring, temperature monitoring is invaluable as it not only monitors the ambient temperature of loads being carried, it also detects any variation in temperature resulting from door opening – whether legitimate or not. Staff related collusion of stock thefts whilst goods are in transit are not uncommon, so this technology helps to combat that too and from an insurance perspective is a very positive addition to a business’s armoury.

Despite all these benefits of the black box, it can be seen by drivers as a negative addition – with some perceiving it as a way for their employer to spy on them or hold them to account when they themselves believe they are driving in a safe and professional manner. The telematics company your business chooses should be able to provide you with advice on how to best introduce the system to your workforce and how to encourage drivers to see it as a bonus rather than an unnecessary and costly new dawn.

As telematics technology continues to develop in sophistication and the breadth of detail it offers for reporting the state and movements of a vehicle in transit, insurers must be prepared to adapt and tailor their policies to reflect each individual company’s level of investment in this advancing technology. Telematics could well bring an end to the upward cycle of the premiums-chasing-claims experience, but embedding the technology successfully within a fleet – with both the drivers and the management – takes time and needs to be done methodically and proactively so that the results collated by the black box are robust and reliable.

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