Are vehicle telematics delivering the full solution for Fleet Operators? No, and here’s why.

“Don’t buy drills, buy holes” is a timeless saying which rings true to many products and services, but more so to this topic. Fleet operators are well versed in the game of purchasing telematics, and many insurers are accustomed to partnerships with telematic providers. So why is the fleet operator and insurer still not interconnected?

Problem –

• There is a chasm between fleet operators and insurers. The chasm is created by hundreds of telematics service providers (TSPs), who sell their hardware into fleets on the promise that insurers can utilise their fleet data to help them underwrite more accurately and inform the claims process and liability decisions effectively. How is the insurer to integrate all these providers? Most large fleets have added complication for the insurer in that they have procured multiple telematics devices within their fleet.
• TSPs are traditionally effective at informing a fleet operator of their carbon foot print so that vehicle routes can be reconfigured for efficacy, and highlighting vehicles that are being driven inefficiently, but the model is floored as they are biased to having to sell their hardware first, and the moment a fleet operator changes provider or has an assortment of providers, the connectivity with the insurer is diluted.
• The market is flooded with TSPs selling their hardware and proclaiming to deliver upon these expectations, but the reality is that fleet operators are simply not experiencing the ROI, and insurers are faced with hundreds of inconsistent data feeds being presented via multitude of unformatted excel spreadsheets or at best user portals. In brief the data cannot be consistently or efficiently ingested, aggregated or normalised to make sense of a fleets risk performance relative to a portfolio of peer fleets to determine if the risk is good, poor or indifferent. This results in commercial fleet insurers having to price on static factors such as:

1. Vehicle type and fleet size – Car, van, bus, haulage etc
2. Trade – sector trade list by insurer underwriting apatite
3. Use – business use, carriage of good, hire and reward, stage work etc.
4. Area – Post code of operation and/or geofencing
5. Claims history – 5 years frequency and incurred costs. Open claims vs closed.
6. Drivers – limits on experience and age plus look at driver performance inc claims and convictions

Need –

• There is an undoubted need for insurers and claims handling companies to have a single system to process data from a multitude of telemetry service providers (TSPs). It is possible that a TSP could provide some comparable capability, but if a fleet changes telematic provider they don’t want to have to change their back-office platforms.

Opportunity –

• A single hardware agnostic system which can integrate with any TSP, understand the dynamic behaviours of the entire fleet.
• Enable the automation to report the first notification of loss (FNOL) on day zero (i.e. when the collision occurs) with high accuracy and report on the facts relating to the collision to inform fast claims decision.
• To identify the real-time behaviours of drivers and create intervention at the near-miss face to avoid collisions in the first instance.
• Offer a centralised underwriting platform pulling many other data sources not just telematics.

Please tell me in the comments below how you are seeing this change come into effect and what you expect to see happen?

Thank you for following me. I will be listening to your comments and following up in the coming weeks with blogs to expand on the market is building on this opportunity with fleets, brokers, claims handlers and insurers.