Telematics programs have reshaped commercial fleet management, offering a powerful blend of data-driven insights and real-time monitoring that enables fleets to operate more safely and efficiently. By capturing critical information on driver behavior, vehicle health and route optimization, telematics provides commercial fleet operators with tools to minimize risk and optimize operations. For commercial insurance loss control teams, these capabilities are invaluable, as they allow insurers to assess, prevent and mitigate risks before incidents occur.
Rising Investment in Telematics Programs
In recent years, the commercial insurance industry has increasingly recognized the potential of telematics in loss control efforts. We’ve seen an uptick in investment to incorporate telematics programs into more risk management strategies. This surge in telematics reflects a shift across the industry. Our 2024 Telematics Report revealed that 60% of commercial insurance carriers now have dedicated telematics teams – more than double from just a year ago. Notably, loss control experts are leading the charge, with 47% of carriers relying on these specialists to drive telematics initiatives and oversee client risk reduction efforts.
This makes sense, considering that nuclear verdicts are one of the most significant challenges the industry is currently navigating. As insurers build specialized telematics teams and integrate loss control expertise, they are better positioned to reduce losses and improve outcomes for their clients.
The Role of Telematics in Enhancing Loss Control
Telematics programs can have a significant impact on many areas of a commercial insurance business, but loss control efforts are known to have some of the most impactful results. There are two primary ways that loss control teams benefit from having their clients’ telematics data:
Proactive Driver Risk Management
One of the most significant advantages of telematics in loss control is its ability to identify risk factors before incidents occur. Telematics equips loss control professionals with the data they need to pinpoint potential hazards early by continuously monitoring behavioral patterns and policyholder risk profiles. By addressing risky driving patterns insurers can reduce the likelihood of claims, creating a safer and more predictable environment for both the fleet and the insurer.
Combining Driver Monitoring and Training
The combination of monitoring and training has proven particularly effective in improving fleet safety. For instance, SambaSafety clients who utilize both telematics monitoring and targeted driver training achieve a 77% reduction in violations. This powerful combination allows insurers to help clients detect risky behaviors and implement corrective measures, fostering a culture of safety and compliance that benefits everyone involved – especially if an incident does occur.
Watch Our On-Demand Webinar: "The Future of Telematics"
Challenges and Barriers to Telematics Adoption
Watching the industry evolve through the research that we conduct is incredibly enlightening. Our 2024 Telematics Report highlights a couple of significant and solvable challenges when it comes to growing telematics adoption.
Lack of Education About Data Sharing
Many commercial insurers are currently under the impression that convincing fleets to share data is the greatest barrier to growing telematics programs, roughly 75% of the ones that we surveyed. Our data, however, shows that 74% of fleets do not share telematics data with their insurer or broker simply because they were never asked. 62% of those fleets don't expect that they would have any challenges in sharing data with insurers or brokers. This is a huge opportunity for carriers and brokers to collaborate with fleets so that they understand the benefits of sharing their telematics data.
Cost of Implementation
Maximizing returns from telematics investments hinges on leveraging the data to create actionable insights that improve client outcomes. While some carriers take on the expensive challenge of building their own telematics solution, many carriers are finding success by partnering with third parties, like SambaSafety, that offer seamless integrations with a broad network of telematics service providers (TSPs). This broad compatibility allows loss control teams to access comprehensive, flexible data solutions that meet diverse client needs, helping to accelerate ROI and improve results.
An effective approach to reduce telematics implementation costs is to leverage data from clients’ existing telematics systems. In fact, 36% of commercial carriers use data directly from their policyholders’ telematics devices, eliminating the need for new installations while still gaining critical risk insights. By working with what’s already in place, loss control teams can provide actionable guidance without the high cost of additional equipment. Recognizing the value telematics programs bring, many loss control teams are proactively subsidizing telematics programs for clients who don’t have a usable solution to encourage client adoption. 71.4% of carriers that we surveyed reported offering or subsidizing telematics-based loss control solutions, making these programs accessible for fleets aiming to reduce risk. These subsidies not only offset upfront expenses but also build client buy-in, leading to a stronger relationship, safer operations and greater ROI for both carriers and clients.
Expected Trends in Telematics Over the Next 12 Months
We’ve learned that a lot can change in the commercial insurance industry within a year’s time. Based on what we’ve been able to observe through our research, there are a couple of trends that we can expect to see continue over the next 12 months.
Predictive analytics within telematics programs will play a central role in minimizing losses, especially as accident severity continues to rise. With vehicle repair costs increasing 23% YoY between 2022 and 2023, carriers will need to invest in predictive analytics solutions that allow them to anticipate and mitigate risks more effectively.
Meeting these demands will require strategic partnerships with companies capable of filling analytical gaps and scaling these solutions across diverse fleet portfolios. Telematics data alone is not enough; it’s about transforming that data into insights that guide decision-making and help carriers and their clients proactively manage risk. Rich Lacey, Chief Product Officer at SambaSafety, shares in a press release, “By combining telematics with violations, roadside inspections and claims, a comprehensive risk profile allows fleets to benchmark performance and deliver targeted training to improve their risk."
Investing in telematics will offer a clear competitive edge, separating those who survive the evolving landscape from those who thrive within it. With telematics at the center of a forward-looking risk management strategy, insurers who are proactive will be able to improve client relationships, reduce claims and improve profitability.
New Telematics Insights Now Available for Download!
Visit the link below to dive into never-before-seen telematics data and trends surrounding insurers, brokers and fleets in SambaSafety’s 2024 Telematics Report: Connecting the Dots on Strategies & Adoption.
