How Companies Can Lower Expenses and Injuries Using Telematics to Improve Driver Safety in their Fleets
By James Barr, Vice President
Distracted driving contributed to 14,236 vehicle collisions in 2020, according to Michigan Traffic Crash Facts — 48 of which resulted in a fatality. While these numbers are disturbing, and only getting worse, the growing sense that so little can be done to reverse the trend is even more unnerving. Beyond the ultimate cost—48 lives lost in just one year alone—the costs of rising medical bills, soaring vehicle repair expenses, and the increasing cost of insurance to account for the rising number of claims all continue to compound as well.
For companies that rely on drivers and vehicles to run their businesses, the concerns of injury and rising costs are even more elevated. According to the Federal Motor Carrier Safety Administration, the number of fatal crashes involving large trucks and buses has gone up by 42% since 2009.
The numbers are staggering any way you look at them. The harsh reality is that insurance companies are forced to raise premiums to keep pace with their own rising costs of paying a skyrocketing number of claims each year, passing much of the burden onto the policyholder. For companies with large fleets, the rising costs can be difficult to absorb.
Fortunately, there is growing adoption of a technology that is working to reverse these trends: lowering the number of traffic accidents and combating the rising costs associated with them at once. This maturing class of technology is known as “telematics.”
How Do Telematics Lower the Cost of Doing Business?
If you’ve tried to access your iPhone with Focus mode on while driving, you’ve already seen a form of telematics technology in action. A prompt or barrier to device usage can activate when you are moving at vehicular speed and will either remind you not to use, or fully prevent you from using, your phone.
Telematics at the fleet level are simply a more sophisticated, feature-rich incarnation of that same principle. Telematics solutions are devices that are attached to fleet vehicles with the ability to monitor and record driving activity and report back to a central location wirelessly. These devices are able to record and communicate any number of things, including:
The speed of a vehicle
The location of a vehicle
The movement patterns of a vehicle
Instances of aggressive acceleration, hard braking and erratic cornering
Distracted driving incidents (e.g., smartphone usage)
Diagnostics data related to fuel efficiency and vehicle performance
More advanced telematics solutions even offer two-way communications. Not only reporting from vehicle to “home base,” telematics can be used to communicate to the fleet vehicle driver. Speed warnings, route detours, change of delivery plans or vehicle status warning alerts—all of these and more can help the central command center of a business better manage vehicles and their drivers in real time…and over time.
Telematics solutions are not just the domain of transportation companies. Any business with fleet vehicles should investigate whether modest investments in telematics technology can not only keep their workforce safe, but perhaps even pay for themselves more than once over.
Benefits of implementing telematics into your fleet include the obvious benefits, as well as some not so obvious:
Improved safety: Simply monitoring and reporting driver behavior can allow leadership to implement safer driving policies to prevent accidents, to reprimand employees in discrete cases, and over time, lower the incidence of careless, distracted or simply dangerous drivers.
Lower costs: Not only will the decrease in accident occurrence save the company money, the telematics solution itself will serve to lower insurance premiums for many policyholders. More and more insurance companies are offering discounts for fleets that have telematics solutions implemented.
Better operations: Telematics can do much more than prevent careless driving. They can monitor fuel efficiency, advise drivers of traffic delays to be avoided in real time, and monitor vehicle performance and maintenance needs. This allows the fleet manager to optimize fleet performance and costs. Telematics can even assist in accident response and emergency activation, if necessary.
Look Into Telematics for Your Fleet
Insurance companies are so inclined to embrace telematics that some have established formal partnerships with specific telematics solution providers, teaming up to encourage adoption and providing significant discounts to those who enroll. Cincinnati Insurance, for example, has partnered with Azuga to serve its commercial auto insurance customers. Providers like Azuga, in turn, extend discounts to the carrier’s policyholders by offering per-vehicle rate reductions.
What’s great about many of these providers of telematics services is that they are often customizable and scalable, offering varying levels of sophistication and ability. Telematics systems can monitor data about fleet performance, fuel consumption, driver behavior and vehicle location. Systems typically use GPS data with mobile phone apps, on-board diagnostic devices and cloud-based management tools. Some use gamification features to encourage participation, rewarding drivers for meeting goals and achieving desired results.
The bottom line is that insurers are embracing telematics and even advocating for them. Owners of commercial fleets, regardless of size, should investigate whether this technology is advantageous for their own companies. It’s quite possible that this technology could save lives, improve safety, increase productivity and lower costs.
It’s a win-win-win-win, as Cincinnati Insurance puts it:
Employers benefit when safety records improve, which can reduce insured losses and keep premiums low. Fleet monitoring can provide data that employers can act on to reduce fuel expenses and manage maintenance costs.
Employees benefit through positive, not punitive, behavior reinforcement. More motivated employees mean a better work environment and worker buy-in to safety standards.
Insurance companies can benefit when attention to safety reduces losses, limiting claims payouts and price increases.
The public even benefits from safer streets and roads.