How to Reduce Commercial Insurance Premium Hikes & Why You Can’t Afford to Wait

Commercial insurance premiums have been on a significant increase recently and much of this is being led by employer safety programs that are unable to effectively influence and instruct their employees. As quoted in this article on BusinessInsurance.com, according to New York-based chief broking officer at Aon PLC, Brian S. Wanat, “With each passing month, rates have gone up more. We’re looking preliminarily at Q3 being greater than Q2 and we see it gaining momentum at this point,” he said. “I think everything outside of workers comp is going up double digits right now, certainly for the larger accounts.” Furthermore, David Perez, Liberty Mutual’s Chief Underwriting Officer, North America, for Global Risk Solutions, says that “For large risks, some property accounts are seeing 30% or 40% increases.”

Every broker has probably been asked for tips and ways that organizations can minimize these inevitable increases and the most common response they give is for organizations to create safety programs that have a trackable impact in reducing incidents. Unfortunately, that is about the extent of the answer, and by the time the organization's human resources team puts together an even more robust employee guide equipped with fancy videos and quizzes or badges of achievement, they aren’t really impacting the total culture of their workplace. The root of the problem lies within the organization’s culture and within each individual’s personal motivators, which is why most organizations tend to miss the mark.?

What does it take to persuade your commercial insurance provider that your organization is taking serious precautions to limit risk to reduce the increase? First off, the lowest-hanging fruit to reduce risk is to address the safety of your employees representing you on the road. Whether they be commercial drivers or your outside sales reps or the managers overseeing them, road safety is the leading and one of the most costly contributing factors to premium increases. In fact, according to this article by CoverHound, Cambridge Mobile Telematics found phone distraction is now the root cause of some 52% of car crashes. Meanwhile, the frequency of collision claims has also skyrocketed in the U.S. over the past several years. This has auto insurance companies experiencing record payouts and according to this article by Forbes, distracted driving could boost your insurance rates by as much as 41%. The concern for your employees driving safely doesn’t just stop when they clock out, but their driving habits can impact your bottom line when they are off the clock too. In 2016, nearly 4.6 million drivers and passengers were seriously injured due to distracted driving, the cost of losing a valuable member of your team impacts morale and in many cases requires your organization to fill a role with limited time and resources.?

How can your organization take the necessary steps to influence safer driving habits for all employees on the road? It isn’t enough to roll out more comprehensive training and guidelines, but fortunately, employers have numerous technologies that can be easily leveraged to customize your approach for each individual and for less of an investment than the cost of not taking the initiative. A common misconception for some is that these technologies are used to “spy” on employees, but the reality is that when these tools are leveraged properly employers are better equipped to tailor training and motivate each individual rather than applying a one-size-fits-all approach that has been proven to be less effective. Here are a few technologies that when applied can help motivate employees to drive safer both on and off the clock:

1. While driving on company time, implement telematics systems for all employees and contractors that drive in any capacity on behalf of your organization. Look for systems that monitor harsh braking, rapid acceleration, excessive speed, and most importantly handheld and hands-free device use. When implementing this technology, be sure to include not only repercussions and actionable steps for repeat offenders, but create an incentive program that genuinely rewards good behavior.?
2. Leverage technologies such as SAFE 2 SAVE already have incentive programs that can be used both on and off of the clock and on both personal and work phones. Remember, there are six motivational factors to consider when wanting to change behavior, not everybody is motivated by the same things so it is important that the programs that hit each of these. Ask yourself the following questions: Will this program help my employees financially? Does this program inspire them? Will they feel like they are making a difference? Will they be recognized for their hard work in changing their behavior? Will more competitive employees have the opportunity to flex their competitive nature? How will our corporate communications adjust to support the achievements of our employees??
3. Create a safer in-vehicle experience by leveraging tech that can actually block device use within the vehicle, such as the SafeDrivePod. These pods are great for company phones, but can also be integrated with other technologies and may be good for up to two devices per vehicle. This can be great for managers (and even loved ones) wanting to text or call their employees while they may be out driving during their shift. The employees will receive their messages when their drive has been completed, allowing them to drive distraction-free.?

When it comes to reviewing your commercial insurance and your bottom line, consider that the ASSE published a survey of financial decision-makers and the average perceived return on safety investment was $4.41 for every dollar spent on safety, read the full report here. Not only do safety programs make smart business sense and benefit the health of your organization, but safer practices also influence the economy on a grand scale. According to the NHTSA, approximately 7% of all motor vehicle crash costs are paid from public revenues. Federal revenues accounted for 4% and States and localities paid for approximately 3%. An additional 1% is from programs that are heavily subsidized by public revenues, but for which the exact source could not be determined. Private insurers pay approximately 54% of all costs. Individual crash victims pay approximately 23% while third parties such as uninvolved motorists delayed in traffic, charities, and health care providers pay about 16%. Overall, those not directly involved in crashes pay for over three-quarters of all crash costs, primarily through insurance premiums, taxes, and congestion-related costs such as travel delay, excess fuel consumption, and increased environmental impacts. In 2010 these costs, borne by society rather than by crash victims, totaled over $187 billion and continue to grow year over year. According to the CDC, for crashes that occurred in 2017, the cost of medical care and productivity losses associated with occupant injuries and deaths from motor vehicle traffic crashes exceeded $75 billion. It is for this reason that hospital systems nationwide too, are anxious to get employers and individuals to address the present dangers on our roadways.