Jon Dye, head of motor, Allianz, looks at the business case behind telematics in commercial vehicle insurance.
Ask White Van Man if he’d like a ‘spy-in-the-cab’ black box and you’ll get a colourful answer. But what if that black box could save lives?
In one recent case, a driver who crashed in a remote area at night owes his life to the telematics which sent details of the accident and location to a control centre, where staff alerted the emergency services.
As well as reporting accidents, telematics can do plenty to prevent them, flagging up poor driving and allowing employers to support employees by improving driving standards. Fewer accidents mean fewer injuries and deaths, and less damage to assets.
There’s a lot to like about telematics. How about the impact on the bottom line? The insurance claim for an accident is only a small part of the overall cost. A driver and a vehicle out of action for any length of time can be expensive, when customers still expect on-time delivery.
Information about how drivers are accelerating, braking and cornering quickly exposes the spectrum of driving talent and responsibility. This information could be turned into a league table, fuelling competitiveness between depots or teams as to who can achieve the best results. Then reward the best drivers to help educate those lower down the table!
Ten years ago the technology was expensive. You couldn’t build a business case if each black box cost in the region of £1,500. But as the technology has evolved, it’s got cheaper, which makes it a lot more attractive.
Telematics is now an affordable and sophisticated ally, helping employers deliver better customer service whilst keeping an eye on driver behaviour, vehicle tracking, fault and incident alerts.
In a sense, this is nothing new. We’ve always used our expertise to manage and minimise accidents. Historically that has involved driver training, both in the classroom and on the road, as well as on-line modules.
Part of this is about changing the culture in UK businesses. If we expect drivers to make too many drops in a day, inevitably there are going to be accidents. Part of our job is encouraging our clients to embrace risk management. By doing that, premiums will reduce as a matter of course.
Smart managers get it. With the help of our new partner FMG, we’re already hearing positive noises from clients who can see the benefits of telematics. In reality Telematics technology can help support businesses in many other ways depending upon the industry and how innovate a business is!
Other factors include fuel economy improving by up to 20%, with drivers who regularly achieve high telematics scores seeing the greatest efficiencies. With an average of £3,000 spent every year on business fuel for a company vehicle, this could save up to £450 per vehicle.
Reduced fuel consumption and a reduction in CO2 emissions go hand in hand, helping to meet standards such as ISO 14001, or company-specific pledges.
We chose FMG after assessing many Telematics products. We like them because they can offer a fully supported service and will take the time to sit down with our clients to find out how real fleets actually work and how telematics can be tailored to be as effective as possible. Through FMG working with us, brokers and clients we have full confidence in the partnership proving to be a success.
We’re excited about the potential benefits telematics can bring; now it’s up to us to spell out those benefits to clients.
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