(Image credit: Holden Baxter/Unsplash.)
Commercial auto insurance in the United States has, in the aggregate, not been a successful line of business for a number of years. However, within the overall negative picture, there have been individual insurers that found ways to make an underwriting profit. And there has been a significant increase in the range and sophistication of connecting technologies available to fleet owners and fleet insurers. These technologies provide real-time and retrospective data that can be analyzed and used to provide loss mitigation and loss avoidance.
(Source: S&P Capital IQ. Click to enlarge.)
Some of these promising technologies include:
- Telematics data accessed by plug-in dongles, or sourced from the vehicle’s manufacturer
- Smart dashcams, road-facing and driver-facing, with AI and machine vision capabilities giving drivers real-time nudges, and providing the fleet owners aggregate analyses of driver behavior
- Monitoring cell phone use–tracking potential distracted driving
- Geofencing apps that can document where vehicles are actually operating, e.g. long hauls on interstates, or deliveries on crowded urban streets
These loss mitigation-oriented technologies are often paired with other applications with broader efficiency benefits for fleet owners, such as:
- Delivery route optimization
- Scheduled maintenance alerts
- Electronic Log Devices (records of vehicle operating hours, federally mandated for certain vehicles)
- Asset Tracking (locations of trailers, other equipment)
A dramatic example of the effectiveness of dashcams is provided by a survey conducted by Marsh Advisory Consulting Solutions (a Marsh McLennan unit). Commercial vehicles with dashcams that are both road-facing and driver-facing had approximately one-fourth as many reportable collisions as those vehicles with no cameras at all.
(Source: Marsh Advisory Consulting Solutions. Click to enlarge.)
Commercial auto insurers can turn the corner by developing an explicit commercial auto strategy; by establishing strong relationships with one or more telematics and fleet management solution providers, and by refining their pricing and underwriting approaches.
Note: The full report, “Is Connected Commercial Auto Turning the Corner?” is available to Celent subscribers at celent.com