NEW YORK—Telematics devices are helping to reduce accidents and remove unsafe drivers from commercial-auto fleets, but effectively incorporating all of the new data into underwriting is a process still in its infancy, say insurance executives.

During the third annual Casualty Insights Conference sponsored here by Advisen on Monday, Executive Vice President, Casualty & Healthcare Divisions for Lexington Insurance Co., Brad Cox, said the electronic devices used to monitor and control driving activity are giving fleet operators and insurers the tools to reduce accidents. For instance, trucking fleets using speed-regulator technology have seen collisions reduced by 50 percent compared to those that don't.

Geofencing technology, which tracks vehicle location, is helping to improve driving efficiency.

Kevin Finn, vice president, National Accounts, for The Hartford, said the adoption of telematics has been “less consistent” throughout the non-transportation industries. But those who have used it see a “huge impact and become believers in the technology.”

A major challenge for insurers is tying the production of data to losses and using the information to validate loss trends over a period of time, said Erin Bellott, senior vice president and product line manager, automobile, for Liberty Mutual. She said the accumulation of this data is in its infancy and the industry does not currently have the tools to incorporate the information into underwriting utilizing long-term models. She said it will be five years before the tools are available.

Craig Bollinger Sr., vice president of risk management for NFI, a trucking company, said he has come to use telematics technology as a learning tool and driver of efficiency.

“Every penny we can save is tremendous,” he said.

Utilizing telematics, NFI addresses drivers after an incident, such as reviewing a driver's hard breaking that could cause a load to shift. He said the review is very personal, explaining to the driver how bad habits can not only cause an accident, but can injure others including the driver himself. Telematics data also provides NFI information to eliminate drivers that pose a safety risk. He said this approach has reduced the company's claims for over three successive years, and he expects even greater adoption in the future.

“It's not a negative; it's not big brother when it is done right,” said Bollinger. “But the problem is with all this data, how do you sift through it and make it really impactful?”

Without a program in place to address and correct issues with driver behavior, he said incorporating the data into underwriting would not be effective.

“It is a big circle and you really have to follow this all the way through the process,” he said.

Correction: Kevin Finn, of the Hartford, said the adoption of telematics was less consistent throughout the non-transportation industry, not the trucking industry.

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