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American International Group Inc.
AIG EUROPCAR SMOOTH DRIVING CONTEST
Telematics product for commercial fleets
If drivers could be made aware of their driving habits and behaviors, could they or would they make changes to become safer drivers?
To find out, American International Group Inc. launched the AIG Europcar Smooth Driving Contest, which ultimately won the 2017 Business Insurance Innovation Award for a risk management team.
“If we were able to tell a specific driver about their behavior, would it improve their driving? That’s what we were trying to test,” said Hilary Browne, head of U.K. liabilities for AIG in London. “That’s how the pilot program was born.”
Collaborating with London-based telematics provider The Floow Ltd. and the Ireland operations of longtime client Europcar Group S.A., a car rental company based in Voisins-le-Bretonneux, France, AIG devised a technology solution to record and analyze driver behavior and then inform the drivers through a score that could be compared with other drivers’ scores.
AIG’s consumer division in Ireland had done “a number of things around telematics,” Ms. Browne said.
“We told (Europcar) about the results we had seen from these consumer products highlighting the potential benefits. They decided to put in place telematics within their fleet of 5,000 vehicles,” Ms. Browne said. Over the next 18 to 24 months, Europcar installed the onboard telematics devices in their vehicles at their own cost, she said.
Telematics had always been useful in compiling claims data for defensibility and other purposes, but “we wanted to see what else we could do with commercial fleet” to potentially improve driver behavior, Ms. Browne said.
Using a telematics system from The Floow, which has worked with AIG for about four years, and technology from AIG, the insurer would inform Europcar rental drivers about their driving behavior on a daily basis, providing each driver with a score based on actions such as speeding, hard acceleration, harsh braking and cornering, Ms. Browne said.
While The Floow’s business is primarily focused on the personal lines insurance industry, “We also provide solutions for fleet management organizations and the auto industry,” said David James, chief operating officer for The Floow.
The platform was built in roughly four months, and it was decided to turn the test program into a competition in which drivers would see how their daily scores ranked relative to others. Weekly winners would receive an Apple watch, with 36,000 rental drivers participating in the contest that ran from Jan. 23, 2016, to May 23, 2016. Data collection continued after that point.
The data collected from the vehicle was analyzed by The Floow and turned into a driver score, which took into account driver behavior, including variables such as time of day, speed and duration of trip, according to Mr. James.
The project proved fruitful, as a substantial reduction in claims activity was observed.
“What the individual (driver) pilot itself showed us was that there was a reduction in the claims experience for Europcar Ireland during that period of 23%,” Ms. Browne said. “So it did, it absolutely changed driver behavior.”
The additional data collected to date shows similar results.
“Now we have almost 18 months of data, and what we can see is a 15% reduction in claims during that period,” Ms. Browne said.
The results speak loudly to the initial challenge of changing driver behavior, according to the pilot participants.
“What we’re proving is that when a driver does know how they’re driving and what their behavior is, they do improve how they drive,” Ms. Browne said.
“We believe that this has taken a proactive approach to informing our customers how they are driving, which has driven down the number of accidents they have,” Colm Brady, director of business development for Europcar Ireland, said in an email, adding that Europcar Ireland “has seen significant improvements in operational efficiencies.
“Europcar Ireland was delighted to take part in what was a very successful project in the introduction of telematics in 100% of our fleet. This trial has now moved into a long-term initiative for the company where we will continue to invest in the hardware and software,” Mr. Brady said.
Possible future applications of the technology include fleet implications, Ms. Browne said.
“Potentially we would be able to aggregate the driver data and provide that data to a fleet manager,” she said. “That’s what we aspire to be able to do, to be able to provide the fleet manager with data in a dashboard.”
Improved driver behavior and reduced claims activity not only have the potential to lower costs but ultimately add up to safer fleet management.
“That’s absolutely our goal, to be able to work with clients and to be able to give them that information and make their fleet and customers safer,” Ms. Browne said.
In addition to the whole data collection system, mobile technology played a further role as drivers used devices to see their scores.
“We saw the vast majority of dashboards accessed through the mobile application, rather than going into a hard drive,” Ms. Browne said.
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Business Insurance’s Innovation Awards recognize the latest developments in risk management.