Measuring the Right UBI Data: Driver Behavior and Risk Assessment

If you’re going to invest your time managing metrics related to your driver’s performance make sure you are not measuring just a very small slice of the overall picture.

(Photo credit: Veronica538.)

 Today, everyone knows that it’s important to measure what you manage and manage what you measure. That’s great, but let’s consider this: what if you’re measuring the wrong data? Or at the very least, measuring data that does not truly give you the accuracy you think you’re getting?

When GPS first was introduced to the mainstream commercial markets, for the first time companies could see their field assets locations. They were empowered! Now what? Knowing where your assets was great, but then came the next level of questions: “What do I do with that data?” And so it began, the evolution of today’s modern fleet management systems and other similar telematics enabled services. We are now seeing the forward progress move into virtually every vehicle, device, and even pet.

Now, let’s consider what the point above about measuring and managing point means for driver behavior, safety, and risk assessment/mitigation.

Today’s fleet management and telematics programs deliver significant value to every business that deploys them. It’s become critical to have one in order to maintain maximum productivity and to stay ahead of competitors. One of the functions many systems have today is “event-based” tracking of driver behavior. This enables a fleet supervisor or other key member evaluate—both in real-time or after the fact—how many times a driver performed a harsh-braking maneuver, or aggressive acceleration or turning. That kind of insight is good… sort of.

(Related: Why UBI Is a Compelling Proposition for Commercial Fleet Insurance)

Event reporting gives you only a sliver of information: the fact that an event occurred. It doesn’t tell you anything about the event itself—for example, whether it was a severe or very minor event, or even the event’s duration. What event-based systems also fail to tell you is how the driver performs when there are no events. The assumption is that they drive well, but how well? How do they compare to the other drivers in the fleet? You can start to see that measuring and managing those “events” can possibly be an exercise in measuring data that does not really give you an accurate picture. It’s like measuring birthdays: it’s great to know you had 50 of them, but which party was the best, or worst? How well did they live each year between  birthdays? Simply knowing the count doesn’t really tell you the whole story.

With the evolution of technology comes the promise of newer and better software and the data that results from it. We’ve all been witness to newer, better, faster, unique applications on the market. Because we’ve measured things one way before doesn’t mean we have to keep doing it the same way if something better becomes available.

Many are aware of the UBI Insurance programs that are offered to individual consumers today. Put in an OBD device in your car and let the insurance company get information about how you drive. Only problem is that these programs are self-selective: only the good drivers are opting in due to the potential discount via some type of loyalty program. In general, they only measure how many miles are driven, time of day, and maybe speed.  A movement afoot is to further the evolution of UBI to what some are calling RBI, or risk-based Insurance. With the further advent of very detailed and accurate driver behavior software, being able to assess risk takes on a whole new meaning for both fleets and insurers.

Incentives to Improve Driver Behavior

Specialty fleet insurers are showing genuine interest at the prospect of having driver scoring software that provides them with details that are expressly related to driver behavior and potential risk assessment. There have been significant discussions regarding their interest in potential cost sharing, which often times can cover much, if not all, of the program’s cost. Consider that the cost of insurance premiums for a fleet driver potentially being on the magnitude of 2x to 3x or more on a yearly basis when compared to the average consumer, especially since the cost of claims can proportionally much higher. Not to mention fleet vehicles can be much more expensive to fix after being in an accident. In addition to all of this, there may be a reduction in maintenance related costs for vehicles driven by better drivers, as well as a reduction in the overall fuel expenses. Add all that up and you have much more of a reason for fleets to invest in understanding and improving their driver behavior.

When you combine a new driver scoring model along with the proper driver training and improvement programs you get a very sophisticated and effective way to safeguard your drivers, your vehicles, and corporate assets. If you’re going to invest your time managing metrics related to your driver’s performance make sure you are not measuring just a very small slice of the overall picture. Much like a puzzle, one piece doesn’t show you the full picture.

Alex Ognjanac // As VP, sales and marketing, Alex Ognjanac oversees all of the sales and marketing efforts for Accuscore, primarily focused on brand establishment and global adoption of the Accuscore solution. He is also responsible for the company’s alliance partner network, which includes TSPs, device manufacturers, and fleets. Ognjanac’s background spans 20 years working in the wireless and M2M environment, including roles at Nextel, Telenav, Isotrak and others. Ognjanac has a B.S. from Cal State Long Beach.

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