Staying ahead of the curve requires more than just traditional underwriting methods. Commercial auto carriers can unlock success by leveraging the power of data to enable informed decision-making and enhance operational efficiency.
Let’s explore how commercial insurers can harness data to boost profitability and achieve sustainable growth. From tapping into alternative sources for motor vehicle records (MVRs) to utilizing telematics data, we'll uncover actionable strategies that can be taken to improve auto insurance profits.
Improve Quote-to-Bind Ratios with Alternative Sources for MVRs
Since it is not cost-effective to pull an MVR for every single quote or driver in a fleet, many underwriters wait until bind to access MVR data and verify provided information. This strategy can increase the risk of inaccurately priced policies, leaving money on the table and creating blind spots for the insurer.
What if there was a way to identify which drivers were high-risk without pulling an MVR? There are modern data solutions that allow you to identify violation activity on all drivers in a fleet at an affordable cost. The violation data can be used to analyze potential risks, such as DUIs or major violations, to gain a better assessment of a business’s profile and the likelihood of future incidents.
Access to better data upfront allows you to easily separate drivers with clean records from those who present the most risk, ensuring your team will never again waste time and money ordering clean MVRs. By identifying high-risk drivers with the click of a button, you can prioritize those requiring further review, and only order MVRs for that population.
Having more information about a fleet at the beginning of the policy term can improve quote-to-bind ratios, minimize claims events and protect your bottom line. This enables insurers to truly understand the risk within their book of business and price it accordingly.
Download our White Paper: Can Deeper Data Insights Save the Commercial Auto Industry?
Continuously Monitoring Driver Risk
So much can change within a fleet throughout a policy period, therefore it is important to always have an eye on how drivers perform. Risk control teams can track trends over time when they have access to a continuous stream of driving data from fleets. This allows them to provide commercial policyholders with detailed insights into driving behavior trends within their fleets, compare their performance to other industries and offer personalized recommendations for improving safety and reducing risk.
For example, a recent report by Lytx revealed that construction fleets saw a 3% decrease in collisions between 2022 and 2023, while automotive fleet collisions increased by 12% during the same timeframe. Having access to these types of trends, coupled with targeted training, can be hugely impactful to both fleets and carriers. Insurers that offer or endorse driver training can benefit from lower violations and losses in their book of business.
Continuous driver monitoring can also empower carriers to adapt their underwriting strategies in real time, ensuring they remain agile and responsive to evolving customer needs. This, in turn, helps them to foster a more collaborative, trusting relationship with higher lifetime value.
Leveraging cost-effective data throughout the policy lifecycle, not just at bind, will strengthen the way your business operates today.
Maximize Insights with Telematics Data
Telematics data is a game changer in the commercial auto insurance industry. The commercial vehicle telematics industry is projected to grow from $66.24 billion in 2023 to $183.41 billion by 2030, exhibiting a compound annual growth rate (CAGR) of 18.5% during the forecast period (2023 to 2030). Telematics data can provide insurers with unparalleled insights into driver behavior and vehicle performance. By leveraging telematics devices installed in fleet vehicles, insurers can access real-time information on risk factors such as speed, acceleration, braking patterns and even distracted driving. This data can be combined with other monitored data sources to gain an even greater understanding of a fleet’s overall risk and increase the effectiveness of proactive interventions.
This granular data not only enables more accurate risk assessment but also empowers insurers to tailor their pricing and underwriting strategies based on a fleet’s overall risk profile. Adding insights from telematics data to the underwriting process gives carriers a competitive edge.
Fleets are eager for more personalized insurance solutions that reflect their actual risk more accurately. They will be more loyal to carriers who offer this level of coverage and partnership.
Seize the Opportunity to Boost Auto Insurance Profits
Being able to harness the power of data has become a prerequisite for success in the world that we live in, and the commercial auto industry is not exempt. Fleets are already taking advantage of the technology available to them. This makes it even easier for insurers to revolutionize their underwriting processes and get back on the path to improving auto insurance profits with some focused investment.
Seize the opportunity to propel your commercial auto business to new heights by downloading our white paper, Can Deeper Data Insights Save the Commercial Auto Industry? via the link below.
