Middle Market Firms May Be Untapped Telematics Opportunity

December 9, 2020

Middle market business owners may be more interested in vehicle telematics insurance products than their agents realize.

Approximately 14 percent of agents surveyed for insurer Nationwide responded that they don’t believe their clients would pay for telematics. At the same time, 93 percent of businesses surveyed said they’d buy the technology to enable safer driving.

“In addition to managing their business, many middle market business owners face the added concerns related to the safety of their drivers and fleet vehicles,” Pete Frey, director of Commercial Lines Telematics at Nationwide, said in prepared remarks. “The results highlight a tremendous opportunity for carriers and agents to change the conversation around telematics from being a nice ‘add-on’ perk, to what it really has become – an essential tool for operating a fleet-focused business.”

Other results further highlight an agent/client disconnect on the telematics issue. According to the survey, 70 percent of business owners said they’d pay between $20 and $39.99 per month per vehicle to add telematics, but 60 percent of agents said they think clients would pay $29.99 or less per month to add the technology.

Frey added that carriers must also be part of the equation in promoting telematics to clients.

“Consider a carrier’s role in the sales or account review processes,” Frey said. “In some cases, connecting a client directly with loss control or product experts can offer additional expertise to help guide the customer and allow you to focus on other ways to serve them.”

Agents said they believe distracted driving is the top cause of accidents. But business owners see driving under the influence, driver error, road conditions and weather as the main causes of accidents for their fleet vehicles.

A large minority of businesses said telematics offers a strong risk mitigation strategy for their business.

Businesses aren’t all raves for telematics. Just under 80 percent of agents said they believe their clients are hesitant about telematics because of privacy concerns and about 37 percent of business owners agree with this sentiment. About 83 percent of business owners said they thought telematics data could spike their insurance rates.

Nationwide commissioned Edelman Intelligence to conduct an online survey of 1,600 U.S. independent insurance agents, mid-market business owners with fleet vehicles and general consumers between June 9 and June 25, 2020.

Source: Nationwide

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