While the use of telematics tools by insurers to date has primarily been seen in monitoring personal-vehicle use, carriers on the commercial side are now eagerly adopting programs to tap into the wealth of knowledge a telematics system can deliver—and the initial data looks very promising for loss ratios.
“We’ve seen a reduction in frequency and severity” of claims, says Scott Stevens, vice president of captive and specialty programs at The Hartford, which launched its FleetAhead program more than two years ago.
The value for insurers extends beyond potential reductions in loss-cost trends and improving risk selection. Telematics may also help preserve the exposure base. By cutting down on costs for its insureds, trucking businesses can remain profitable.
For the insurer, information also can be provided by some systems to provide a much more accurate view of an accident. Was the traffic light green or red? How fast was the driver going?