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Enhancing Commercial Auto: The Essential Telematics Playbook

Telematics, a fusion of telecommunications and informatics, empowers insurers with real-time insight into vehicle usage, driving behavior and other metrics that inform risk through connected devices. Below, we’ll explore the myriad benefits, challenges and the essential steps required for a commercial insurer to successfully implement telematics into their organization.

Benefits of Telematics Data in Commercial Insurance

The adage of “when you know better, you do better” rings true when applied to incorporating advanced data and analytics into any business process. Insurance telematics is viewed as a path to profitability for Commercial Auto as it increases the effectiveness of existing Enterprise Risk Management (ERM) strategies. Insurers that make the appropriate investments will reap significant benefits and gain greater stability than their competitors. Here are several ERM areas where telematics can have the greatest impact:

Risk Appetite & Strategy

Telematics data provides insurers with a more granular view of a commercial fleet’s driving patterns and can be used by insurers to better inform or validate traditional rating factors, such as mileage and number of active drivers. This deeper level of insight can improve underwriting precision and reduce premium leakage.

Risk Transparency & Insight

Real-time monitoring through telematics allows insurers to identify risky driving behaviors and track developing risk exposure in near real-time. This information leads to an improved understanding of loss patterns and increases the efficacy of loss control mitigation efforts. This is most effective when insurers combine insights with policyholder services like targeted training, to proactively improve on risk. As John Barbagallo, special advisor to SambaSafety, shared in his article with Carrier Management, “Telematics provides invaluable data on driver behavior, but the cornerstone of improving commercial driver safety is comprehensive driver training.” By providing feedback to fleet managers, insurers can proactively address unsafe practices and lower claims frequency, ultimately reducing the likelihood of nuclear verdicts.

Risk Decisions and Processes

Telematics brings tremendous potential for streamlining and automating processes throughout an organization and the policy lifecycle. This allows insurers to leverage data to offer usage-based insurance products that dynamically re-rate policyholders at established timeframes and align premiums to their business growth. Loss control teams can establish risk thresholds based on behavior or mileage to easily track progress throughout a policy period, and reward positive behaviors with discounted premiums or services.

Download Now | Free White Paper: Step-by-step Guide to Commercial Insurance Telematics

Challenges of Implementing Telematics Programs

While the benefits of integrating telematics data into commercial insurance processes are clear, there are several challenges that insurers may encounter during implementation. Let’s explore some of the things that insurers must overcome for a successful telematics implementation:

Data Privacy Concerns

Data collection and analysis is the name of the game for telematics and it always raises important privacy considerations. Carriers should be educated about regulations such as GDPR and CCPA as they’ve become the gold standard for data management in recent years. Clients expect upfront transparency about how their data will be used and protected.

Technology Integration

Integrating telematics systems with existing insurance platforms and workflows can be complex and require significant investment in technology infrastructure and resources if an insurer chooses to go the road alone. Commercial insurers who want to scale or accelerate their speed to market choose to partner with an experienced telematics aggregator, like SambaSafety.

Data Quality and Accuracy

The accuracy and reliability of telematics data are crucial for making informed underwriting and claims decisions. Insurers need robust systems in place to guarantee data integrity and minimize errors or discrepancies.

Implementing a Commercial Telematics Program

A trusted leader in insurance telematics aggregation, SambaSafety has over a decade of experience supporting commercial insurers as they navigate the complexities of telematics. This experience coupled with our deep understanding of driver risk management allows us to better support our customers wherever they are in their telematics journey – from planning to early implementation and scaling their program. 

Charles Smith, Vice President of SambaSafety’s global insurance and telematics products, and John Barbagallo, SambaSafety Strategic Advisor and former Commercial Lines President at Progressive, have developed a telematics playbook for commercial insurers. This step-by-step guide outlines best practices to approaching telematics for commercial auto, based on their experience both at the carrier and partner level.

The playbook covers eight steps with accompanying exercises for each:

  1. Assessing an insurer’s position on our insurance telematics maturity curve
  2. Prioritizing use cases and outcomes by business area
  3. Analyzing business processes
  4. Setting SMARTER goals to measure success
  5. Planning for data protection and privacy
  6. Deciding on a telematics deployment model
  7. Anticipating what challenges may arise
  8. Building a best-in-class telematics data asset

Download Our Commercial Insurance Telematics Playbook

To learn more about how to successfully implement a commercial insurance telematics program, download “Beyond the Roadmap: A Step-by-Step Guide to Crafting and Deploying a Commercial Insurance Telematics Program”. This comprehensive guide provides in-depth guidance and best practices for insurers to introduce telematics and maximize its benefits.

Download your copy today and embark on the journey to transforming your commercial insurance offerings with telematics.

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