2016 Innovation Awards: Liberty Mutual Insurance Co.Reprints
Commercial transportation companies collect tons of data on the performance of their drivers and fleet vehicles, but figuring out how to use it to improve driver safety had been challenging until Liberty Mutual Insurance Co. found a way to do that.
The Managing Vital Driving Performance program is a method transportation policyholders that use telematics data can use to improve driver safety.
The program, a winner of the 2016 Business Insurance Innovation Awards, came from the collaborative effort of two Liberty Mutual leaders: Peter R. VanDyne, Milwaukee-based technical director of risk control services; and Jennifer Weiler, Seattle-based director of product management of commercial insurance telematics.
Mr. VanDyne said he thought policyholders could use telematics, a wireless technology used in vehicles that collects performance data for fleet organizations, as a risk management tool to pinpoint drivers with driving performance that needed corrective action.
Initially, he said, policyholders had been overwhelmed with the quantity of the data. Telematic vendors produce “a mountain of data” for their commercial fleets, he said, such as alerts when a driver drives over the speed limit. “One client was seeing 400 driving alerts a week,” Mr. VanDyne said. “We needed to be able to find a process to get through that data.”
Although companies had telematics technology installed in their vehicles years ago, it's only recently that they have felt comfortable using the data and sharing it, said Ms. Weiler. Now they wanted to find innovative ways to use the data to benefit their business.
“Our fleet customers already had telematics but wanted to know how to interpret the data so they could have meaningful conversations with their drivers about their driving,” she said. “Customers were starting to come to us asking for this, to help them manage their risk,” she said.
In a pilot test involving over 180 vehicles, there were less aggressive driving event incidents involving acceleration, braking and speeding after the introduction of the Managing Vital Driving Performance program, a company spokesman said.
In the program, risk experts analyze the collected data to find drivers who are performing below the norm. The next step is focusing on remedial efforts for those particular drivers. In the past, training played a big role in that effort, but it wasn't always effective, Mr. VanDyne said.
“We wanted to get away from training as a solution for aggressive drivers because people drive like they do because of behaviors,” he said. Instead, they identify trends over time and look at root causes of the behavior to learn why it is happening. “Maybe they hired someone with a history of these types of events or perhaps management has a compensation system that encourages their drivers to drive aggressively to make more money,” he said.
After the root cause is discovered, Liberty Mutual's transportation risk control experts work with policyholders to find solutions.
“We are taking this one step further than any insurer has on the personal or commercial side,” Ms. Weiler said.