Telematics Is Changing the Way We Understand, Prevent and Mitigate Risk
Modern technology is transforming risk management. In the past, risk management was largely reactionary out of necessity. Incidents happened, and insurers and safety experts responded. Now, thanks to telematics, business owners can see risky behaviors in real-time and make corrections, sometimes even before a loss occurs. This is a game-changer for both business owners and their insurers, and it couldn’t come at a better time.
Traffic Fatalities Are Surging
Safer vehicles and driving habits helped bring down traffic fatalities, but it appears that much of this progress has been undone. The NHTSA says that 38,834 people died in traffic fatalities in 2020. Overall miles driven and police-reported crashes were down due to the pandemic, but traffic fatalities increased by 6.8% compared to 2019, and the fatality rate per 100 million vehicle miles traveled increased 21%.
In 2021, people started driving more again, and the situation got even worse. The NHTSA says that there were 42,915 traffic fatalities, a 10.5% increase compared to 2020. That’s the highest rate since 2005.
Fatalities involving large trucks have increased at an even steeper rate. In 2021, fatalities involving at least one large truck increased 13%. That’s a significant jump, and employers should be paying attention.
The Economic Toll of Accidents
When workers are injured on the job, a workers’ compensation claim will likely follow. According to the National Safety Council, the average cost of a workers’ compensation claim from 2018 to 2019 was $42,008. On top of this, the company will likely experience downtime and lost productivity, and there may be property damage as well.
If a third party is involved, the resulting lawsuits can be many times more expensive. In one example, FreightWaves says that a jury awarded $10 million in a case against an Illinois-based trucking company. One of the company’s former drivers crossed a median and collided with a pickup truck, killing the driver. The defendant’s attorney claims the truck driver experienced a medical event that contributed to the crash, while the plaintiff’s attorney says the driver fells asleep due to illness or fatigue.
Jury awards worth $10 million or more are often called nuclear verdicts, and they’ve been increasing as part of a trend known as social inflation. This means that liability and defense costs keep climbing higher.
Technology Provides a Solution
Between rising claims costs and surging traffic fatalities, the situation can look bleak, but there is a light at the end of the tunnel. New technology has the potential to improve safety, save lives and reduce costs.
Telematics is often associated with usage-based insurance, a new pricing model that can help safe and low-mileage drivers save on car insurance premiums. However, the benefits of telematics go way beyond this.
Historically, companies would create safety policies, but enforcing these policies could be difficult. For example, you might tell drivers not to speed, but you might not know whether they’re actually listening – until there’s a ticket, or worse, a crash.
Telematics systems are changing this. Fleet operators can monitor drivers and trucks in real time. It’s not just for the transportation industry, either. Solutions like altumAI can be used in industries like agriculture to assess risks and provide tailored safety scores and training materials.
How Telematics Is Changing Risk Management
Telematics can provide valuable information before and after an incident. Here are four ways telematics can revolutionize risk management:
- Identify risky behavior. One of the key benefits of telematics is the ability to see risky behavior as it happens. For example, if drivers are speeding or braking too hard, fleet managers can see this and take corrective action.
- Monitor mechanical issues. Mechanical problems can trigger crashes and injuries. Programs that check for issues can help fleet managers keep up with maintenance which can lead to more expensive issues.
- Provide evidence. If an incident occurs, telematics programs can provide evidence that may exonerate innocent parties and help pinpoint the true cause of the incident.
- Deliver insights. Data can be powerful, and telematics programs provide ample data. This data can be used to uncover changes that could boost productivity and improve safety in the future.
Tangram Risk Management Solutions
Tangram is leveraging fleet telematics to increase safety and reduce accidents for clients who are insured through our Propane & Fuel Oil Dealers Insurance Program.