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Telematics drives behavioral changes behind the wheel

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When Jamie Pierson looks at a semitractor-trailer, he sees a lot more than just a truck.

“Tractor-trailers today, the way we view them, are rolling computers,” said Mr. Pierson, chief financial officer of YRC Worldwide Inc., an Overland Park, Kansas-based holding company for several freight companies. “Five or 10 years ago, it was a chaise, a cab and an engine. Today, all the data we're able to get because of all the telematics on a real-time basis is incredible.”

Telematics, a wireless technology used in vehicles to collect performance data, can relay to fleet managers such information as a vehicle's speed, braking and distance between cars.

“If there are certain things we're looking for in terms of habits of drivers — do they accelerate too hard, do they brake too hard? — that's the type of information we want to have,” Mr. Pierson said. “We can sit down with the driver, and we can say, "Hey, you need put to more distance between you and the car in front of you' or "Don't run so hard up into a stoplight.'”

“From an insurance perspective,” Mr. Pierson said of telematics, “I think that this is incredible in the long run. Today, it's probably not that much of an impact and maybe not that much tomorrow, but in the next year or two, we should see much, much, much better experiences.”

Todd Ewing, director of product marking for Dublin-based Fleetmatics Development Ltd., said in an email that “telematics has revolutionized the management of the mobile workforce.”

“It provides fleet managers and operators access to real-time and historical vehicle and driver behavioral data,” he said. “Fleet managers can now monitor the location, movement, status and more of a fleet vehicle and its driver. In turn, these insights can be used to increase productivity, reduce labor costs, control fuel costs, increase fleet safety and more.”

Rich Bleser, Milwaukee-based fleet specialty group practice leader for Marsh Risk Consulting's workforce strategies practice, said telematics has allowed companies to essentially get into the cab with the driver, “not as Big Brother, but more so as an opportunity to guide them, coach them and massage those risk-free behaviors” to protect drivers and reduce collisions.

“The insurance marketplace is starting to look very favorably upon organizations that effectively capture and use telematics data,” he said. “By the same token, the insurance marketplace is also very reluctant to have this data captured if an organization is not prepared to use it or chooses not to use it.”

Noting the variety of telematics programs available, Christopher Hayes, second vice president of transportation risk control for Travelers Cos. Inc., said the ability or willingness of fleet managers to use the data to improve safety also varies widely.

“From what we have seen in our fleet assessments, only one-third (of fleet managers) with telematics programs take full advantage of the safety information available to them,” he said. “The larger and more well-run the fleet, the more likely it is to have telematics.”

A 2015 Travelers customer survey found that 8% were using telematics in light trucks and vans, and 11% were using telematics for medium, heavy and extra-heavy trucks.

Mr. Hayes said that since most companies with commercial trucks in the U.S. must begin using electronic logging devices to monitor driving hours by December 2017, “we anticipate that many commercial fleets will look for integrated systems that provide telematics data as well as electronic logging.”

Liberty Mutual Insurance Co.'s Managing Vital Driving Performance program, which won a 2016 Business Insurance Innovation Award, is geared toward helping policyholders use telematics data to improve driver safety. “You don't want to collect too much information,” said Peter VanDyne, Liberty Mutual's Milwaukee-based technical director of risk control service who developed the program, “but you want to capture what's truly aggressive and not what is the normal driving style.”

The program doesn't focus on just the drivers; Mr. VanDyne said its root-cause analysis is probably geared 60% toward management.

“It's easy to say, "Well, gee, if we just train these drivers, the problem will go away,' when really you may need management systems changes to address the motivation,” Mr. VanDyne said.

While telematics might raise concerns about privacy, Javier Baixas, Chicago-based InsurTech lead for PricewaterhouseCoopers L.L.P., said gamification, which applies game mechanics and design techniques to motivate people, is one way to inspire drivers.

“I'm willing to share my data if I get some benefits from it,” Mr. Baixas said. “Make the journey a game.”

He also said the telematics data could help cut insurance costs: “If I use my data to understand what my risk factors are, and if I act to minimize drivers' risk, I should go back to the insurance company and say I want to pay lower premium because my risk is lower. You will have the data as proof.”