Is telematics worth the investment?

YES - Ian Walmsley, chief executive officer, Eagle-i Holdings

Telematics is most definitely worth the investment – providing you understand the key success and failure factors.

There should be no luck involved in a successful implementation of telematics.

However, based on more than 30 man-years of implementation experience across a wide range of vendor systems, we believe the majority of system implementations rely almost exclusively on good luck and little else.

As a consequence, and unsurprisingly, many telematics implementations fail to meet their expected level of return on investment (ROI).

The root cause of these ROI challenges can be traced back to the attitudes and capabilities of telematics service providers (TSPs) themselves, especially in three crucial areas.

Too many TSPs market telematics systems as a “product” rather than a “solution”.

Telematics should be viewed as an IT solution that requires managed implementation support rather than a product that you simply fit and forget.

At the same time, many TSPs rely on the sale of generic telematics systems, using a one-size-fits-all approach that is simply unsuitable for most businesses.

Too many current systems have evolved from applications for HGV fleets with a high degree of functionality that is inappropriate for car or lcv fleets.

And too many TSPs focus on data rather than information that comes out of telematics systems.

They produce masses of data, but not the key performance indicators (KPI), benchmarking and exception reporting required to allow managers to take effective business decisions.

If your TSP provides implementation support, targeted functionality and management information by exception and KPI, you have an opportunity to make a great ROI. In our experience, and in that of many of our customers, that return can be as high as eight times your investment.
 

Denny PaytonNO - Denny Payton, Partner Corclaim, Harvey Ingram

Telematics obviously has a lot of benefits when it comes to any fleet.

However, is there any real evidence that it can dramatically contribute to reducing incidents involving commercial vehicles, through data analysis and identifying cases of fraud?

There are claims that telematics can reduce insurance premiums.

However, I struggle to see how this can be true in isolation. Insurance premiums can be affected by many factors but ultimately it’s the cost of the claims spend that will be crucial.

The primary cause of any fault incident is the driver’s lack of attention.

For commercial vehicle incidents, while speed may be a minor contributing factor, it is rarely the single or even major contributing factor towards that incident happening in the first place.

Even if the data being recorded could be matched with only actual incidents, how much value can be added towards a well-run risk management programme, from analysis of the telematics data alone?

With the exception of vehicle tracking for theft claims, the contribution towards fraud must be minimal.

For injury claims, it is alleged and generally accepted by medical practitioners (although argued mostly by defending parties) that any incident involving a reduction in speed of upwards of 5mph can cause soft tissue injury.

As a percentage of a portfolio, how many cases are there where the fraud element relates to the incident allegedly never happening at all and the telematics data can support that?

Telematics is in its infancy as far as its use with vehicle incidents is concerned, but there are some bold statements being made, without very much hard evidence.

So when it comes to commercial vehicle incidents, perhaps for now at least, I remain unconvinced.