Proactive risk control is becoming more important for commercial insurers as the industry faces an increase in dangerous driving, loss costs and steep litigation outcomes. Today’s policyholders need a proactive risk management plan that works to mitigate the likelihood of future claims. Let’s explore how commercial driver training directly impacts the risk profile of your clients.
The Future of Auto Depends on Commercial Driver Training
Ensuring drivers are well-trained is both a regulatory necessity and a strategic imperative that will pay dividends. If taken seriously, driver training can proactively reduce loss costs and minimize the likelihood of costly litigation.
While roughly 55% of insurers that we surveyed currently offer driver training services to fleets in their book, the remainder do not have plans to offer these solutions. This is a significant missed opportunity, especially when considering the benefits outlined below.
Enhance Safety to Reduce Claims Severity
Automotive accidents have far-reaching consequences for commercial carriers. Each incident can lead to costly repairs, increased insurance premiums and potential legal liabilities. With claims severity up 36% from 2020, insurers need to do everything in their power to help clients avoid costly incidents.
A great place to start is driver training, which targets specific risky behaviors and reduces the driver’s likelihood of participating in future claims – thus enhancing safety and reducing the severity of claims.
Prevent Nuclear Verdicts
Driver training can play a crucial role in helping insurers protect their businesses against nuclear verdicts. Training lowers the incidence of severe crashes that could lead to litigation by minimizing risky behaviors and enhancing drivers' ability to respond to hazardous situations. Moreover, well-documented training programs demonstrate a commitment to safety, which can be a powerful defense in court and potentially mitigate the impact of lawsuits.
Decrease Exposure for Better Renewal Rates
Training can also aid commercial insurers in improving renewal rates. By targeting poor driving behaviors and decreasing exposure to risk, policyholders experience fewer claims and lower loss ratios – making their risk profile more attractive to underwriters. As a result, insurers can offer more competitive premiums and favorable renewal terms, increasing the likelihood that clients will renew their policies. Additionally, demonstrating a commitment to safety through rigorous training programs enhances client trust and satisfaction, further boosting policyholder retention.
What Makes Training More Effective?
Driver training is much more impactful when it is data-driven. Using continuous feedback on a fleet’s driving activity allows for more targeted, personalized interventions based on actual performance metrics.
Telematics data, for instance, tracks behaviors such as speeding, harsh braking and rapid acceleration, providing insights into risky driving patterns. By layering this data into training programs, policyholders can assign specific courses that work to correct these issues before they escalate into crashes and costly claims.
Our recent Efficacy Study showcases the value of combining monitoring and training:
- Fleets that implement both monitoring and training together saw a 77% reduction in violations within the first year.
- In comparison, fleets that only leveraged monitoring had 32% fewer violations on average after the first year.
What Can Insurers Monitor?
When it comes to monitoring, it’s critical to consider all data sources. Below, we explore different tools that work together to establish the complete picture of a fleet’s risk.
Telematics Monitoring
From speeding to hard braking and distracted driving, telematics monitoring can give insight into actions being taken within a vehicle. Telematics data can help pinpoint exactly what areas a fleet of drivers needs to be trained within. Leveraging this behavior-based data for training can be incredibly useful considering that it can be highly individualized.
MVR Monitoring
Motor vehicle record (MVR) monitoring allows fleet managers and insurers to gain a more complete view of the risk within a fleet. Where telematics monitoring picks up on individual actions a driver might take in the vehicle, MVR monitoring watches for changes on a driver’s record, including violation history. With ongoing insight into violations, policyholders can implement targeted interventions to correct the behaviors related to these incidents as soon as possible.
CSA Monitoring
Compliance, Safety, Accountability (CSA) monitoring uncovers regulated drivers’ compliance with the Federal Motor Carrier Safety Administration (FMCSA) guidelines. Through CSA monitoring, carriers can track and receive alerts on the violations, citations, roadside inspections and DOT-reportable crashes contributing to CSA scores. This enables the development of more targeted intervention programs that ensure drivers adhere to regulatory requirements and maintain high safety standards.
Elevate Policyholder Risk Control
In a competitive industry where margins are razor-thin and the stakes are high, the importance of driver monitoring and training cannot be overstated.
To discover current industry trends that emphasize the need for driver training programs, watch our on-demand webinar. Our experts uncover risk insights affecting both insurers and their policyholders – with tips for how they can work together to mitigate them.
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