Drivers may see it as “Big Brother”, but insurers and program managers that cater to commercial fleets say the use of technology such as cameras, black boxes and other tools that manage fleets is increasingly viewed as the cornerstone of smart risk management.
The technology can take different forms and approaches. Dash-mounted cameras, for instance — which capture views of both the road and of a driver — are becoming increasingly common. But there are also “black boxes” or other measuring devices that can record the raw data of bad decision making: heavy braking, quick acceleration, proximity to other vehicles or a host of other information that fleet managers can then use to manage how drivers handle their vehicles while on the road.
Although neither technology is new — electronic control modules, a kind of black box that has long been present on any vehicle with electronic ignition — the costs of litigation and ancillary benefits like the ability to improve fuel mileage have made them more attractive. And costs have come down as more products have come on the market.
In the end, the technology and its approaches can vary widely, but the goal is generally the same: modify and manage driver behavior before an accident or incident. For insurers — which inevitably pay the costs of driving mistakes — it’s the type of thing they can really get behind.
“Drivers can make hundreds of unsafe decisions before a crash occurs,” said Charlie Johnson, vice president of loss control for 5 Star Specialty Program, part of Crump. “What this electronic technology allows us to do is measure unsafe decisions, then capture, analyze and manage it to prevent and reduce crashes.”
Johnson, based in Melbourne, Fla., said that clients are increasingly looking toward a variety of devices to improve fleet management, increase safety and lower incidents on the road.
One example, according to Johnson: An ambulance company wanted to ensure that its drivers kept below a certain speed limit. To reinforce that speed limit, they attached a silver box that would click if the vehicle exceeded the speed limit. If the speed went significantly over the speed limit, it would buzz — requiring the driver to slow down to stop it.
Other techniques are subtler, but still made possible through technology, Johnson said. He pointed to the experience of another customer — a commercial trucking firm with roughly 100 drivers — that used electronic systems to measure drivers’ data according to a set list of safety items, such as speed, braking or other items. They use results from this data to adjust drivers’ behavior on the road and increase safe driving.
“I see this technology as a key factor in fleet operations going forward,” Johnson said, adding that the technology can be integrated with other systems to help focus on behaviors that improve fuel mileage — a big concern for companies, as fuel prices climb.
Jennifer Funkhouser, CEO and co-founder Indianapolis-based CarCheckup — which recently began selling a product that helps fleet managers monitor safe driving as well as mileage — said the potential for tracking drivers and their behavior is a big enticement for those with commercial vehicles on the road.
By reviewing driver performance, checking for aggressive driving speed, fleet managers can lower the likelihood of insurance claims, she said. Plus, the technology can monitor mileage and keep track of business miles driven – another item drawing interest from fleet managers, she said.
David W. Michelson, president and CEO of Ohio-based specialty insurer National Interstate Insurance Co., said technology is playing a key role in the management of fleets – particularly risk management.
“There’s lots of different technologies that have come on the scene, whether it’s warning systems, back-up cameras or sync from vehicles, technology companies are coming on the scene all the time,” he said. “Every technology is not for everyone, but there is at least one technology for everyone. It’s growing and it’s here to stay, without a doubt.”
In National Interstate’s case, Michelson said that accident event recorders have been excellent tools. These are basically cameras installed on the interior of the windshield of vehicles with lenses that focus both on actions by the driver and on the road simultaneously. The cameras are activated by G-forces, and can record a few seconds before and after a crash.
At the Target Markets conference in Boston in May, Michelson showed some dramatic footage gathered from a camera that helped to determine that a fleet’s driver was not at fault. In the video, a black SUV clearly makes an improper turn in front of a truck and is struck. The video provided concrete evidence that the driver was not at fault — meaning the owner and insurer wouldn’t be paying any claims for the accident.
It can be beneficial with subrogation, but even if the driver was at fault, the insurer would still want to know, Michelson said. “We want to write a check and stay out of the courts,” he said. “We don’t want to deal with jury pools. Those odds are worse than going to Vegas and they’re not getting any better.”
Plus, Michelson said, the cameras also have tremendous value in modifying drivers’ behavior — be it to improve safe driving or lower fuel costs — which is a major selling point for fleet managers.
Michelson’s firm is so supportive of the cameras that he said National Insterstate has installed approximately 12,000 cameras at a total cost of $5 million. “It’s a technology we really believe in,” he said.
For 5 Star’s Johnson, the value added benefits of using technology to help clients manage fleets is fast becoming a key value added benefit for those in the business of insuring commercial transportation risks, he said.
“The managers and owners understand that it is money well spent,” Johnson said. “I estimated that, for every dollar spent on crash avoidance technology, they will get it back three to four times over (in savings and other benefits). And I think that’s maybe conservative.”