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Leveraging telematics to get the most from insurance
Fleet owners are quickly adopting telematics as part of their risk mitigation strategy. Here’s why.
Telematics for fleet owners
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    Both large and small fleets can benefit from integrating telematics into their vehicles. In this article, we break down what telematics is, how large and small fleets can most benefit from it, and how to start creating your telematics strategy. Learn about how telematics works with your insurance provider to offer favorable consideration and reduce risk.

    What is fleet telematics?

    Telematics is the use of GPS technology and onboard diagnostics to track and monitor a vehicle’s movements and report them back via a cellular network. It requires both hardware (sensors and an in-vehicle telematics device, or “black box”) and software to interpret the vast amounts of data gathered. Telematics technology has been around in some form since the 1960s, but only in recent years has it been adopted at scale by the trucking industry.

    Telematics fast facts

    of large fleets use telematics
    of small fleets use telematics
    share telematics data
    with at least one service provider¹
    Telematics is part of a broader strategy for cost containment, helping fleet owners see and understand where cost issues are affecting their bottom line: fuel usage, traffic, travel times, route optimization, and more. Telematics also helps address safety issues, including speeding and driver behavior inside the cab. Commercial auto insurers have also embraced telematics as a way of reducing risk and providing underwriters with a more accurate picture of fleet operations and the respective exposure.

    What kinds of fleets can benefit from telematics?

    The short answer? All of them. Both large and small fleets, short range and long haul, can reap cost savings and safety benefits with telematics.

    • Large fleets: Fleets with a large number of vehicles (50 or more) can use telematics to monitor and track their vehicles’ locations, route efficiency, and traffic conditions. This real-time data means better allocation of resources and increased uptime. Areas of focus may include:
      • Vehicle diagnostics
      • Vehicle inspection reports
      • Idle time vs. uptime
      • Compliance
      • Improve service levels
    • Small fleets: Smaller fleets (50 vehicles or fewer) can use telematics on a smaller scale to improve performance and realize cost savings. Since smaller fleets often don’t have dedicated fleet managers, telematics can ease the workload of the person responsible while helping them monitor driver behavior. Improved uptime is especially important for smaller operations, for whom one vehicle can represent a significant portion of the fleet. Areas of focus include:
      • Geographical location and geofencing
      • Job dispatch and messaging
      • Improved utilization

    All about data: Who owns it and why it matters

    In most cases, you, the fleet owner, own any data derived from your telematics system. You can then choose to provide that data to companies or vendors to help build operational efficiencies or strategies for reducing risk; for example, monitoring cargo or conducting preventive maintenance.

    It’s also important to give your commercial auto insurer access to your data. Insurance companies use this data in several ways to customize your insurance and reduce risk.

    It’s also important to share your data with your insurer so they can customize your insurance and help you reduce risk.

    How insurance companies use telematics data

    Determine rates based on vehicle location, routes through certain jurisdictions, time of day or night, type of truck, and other factors.
    Identify risky drivers in your fleet that may cause your premium to increase or pose a safety risk.
    Conduct accelerated loss validation and verification, identify fraudulent claims, identify responsible parties in an accident, and conduct accident reconstruction for evaluation.

    How to build a telematics strategy

    The first part of building a telematics strategy is determining which metrics are critical to your operations. From there, your telematics provider will help build dashboards to create a snapshot of fleet movements, set up alerts and notifications, and call out and address risky driving behavior.

    Telematics strategy checklist:

    • What efficiencies are critical to your organization?
    • Is there a risk prevention or safety piece that needs implementing?
    • Do you need to evaluate different platforms, cameras, or telematics providers to get the results you are looking for?
    • Do you have a single position dedicated to telematics strategy and implementation within your organization and driver pool?
    • How will telematics integrate into your current systems?
    • What kind of support will you receive from the provider?
    • Does it need to scale with your business, and can it provide specific types of insights for your type of business?
    • What type of adoption will work best for your company?

    Insurance and technology: A holistic solution

    Like any technology, telematics is one part of risk mitigation for fleet owners. Insurance is the other.

    Telematics helps underwriters focus on relevant information to rate the account correctly; for example, pinpointing exposure in a specific part of a state where the fleet operates, rather than using the exposure of the whole state. It also tells your insurer that you are actively using technology to correct driver behavior and mitigate risk hazards before a claim occurs. It shows your dedication to being a safe operation, which is ultimately what an underwriter wants to see on the road.

    At Munich Re Specialty, our Mobility practice is committed to not only providing you with comprehensive Commercial Auto Insurance coverage but also helping integrate technology to keep your costs down and your fleet safe.

    Visit our Transportation solutions page today

    Contact our expert
    Leo Grimm
    Leo Grimm
    Head of Mobility
    Munich Re Specialty
    About Munich Re Specialty Munich Re Specialty – North America products and services are offered by and provided through insurance companies and producers/surplus lines brokers that are eligible or licensed in accordance with the laws and regulations of individual jurisdictions. Products and services are not available in every, and may vary by, jurisdiction. The information provided on this site is intended as general information only and does not constitute an offer to sell or a solicitation to purchase insurance or non-insurance products and services. Please be aware that the insurance policy and not any information provided on this site will form the contract between the parties thereto, and will govern in all cases. Munich Re Specialty – North America’s insurance products and services in the United States, Canada, and the United Kingdom are underwritten and provided by or through one or more of the insurers, producers/surplus lines brokers that are members of the Munich Re Group identified below. Each company is financially responsible only for insurance policies it has issued. For more information on Munich Re Specialty, including licensing, regulatory-required, and other information on the operating companies, please click here.


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