5 benefits of tech agnostic driver risk scoring for fleet insurers

Considering the number of telematics service providers (TSPs) in the market, and the increasing percentage of vehicles leaving the production line with original equipment manufacturer (OEM) telematics installed, it’s safe to say that your policyholders likely have a wide range of telematics devices installed.

When you then consider that every TSP and OEM scores driver behaviour according to their own criteria, getting an accurate view of where risk lies in your motor book of business is almost impossible.

So, how can you go beyond claims history to get an accurate assessment of your risk exposure?

First, let’s explore 5 reasons why you might want to:

1. Identify high risk fleets currently on your cover

Claims history is often a reliable indicator of how a fleet is being managed but it doesn’t offer a complete picture. A low incident rate may be the result of good driving, or it may also be down to good fortune.

By comparing your claims data with aggregated driver behaviour data from your policyholder’s telematics, you can immediately start to establish patterns.

This information can then be used to generate an overview of which of your fleets currently on cover pose the greatest risk. Ultimately enabling you to, where appropriate, put proactive risk management strategies in place to reduce the risk before it results in claims.

2. Measure the impact of your risk management strategies

Fleet risk management comes in many forms; driver behaviour intervention, eLearning, and compliance checks to name just a few. To be able to measure the impact of a strategy, you need a set of normalised data to allow for comparison across a large data set.

Tech agnostic driver risk scoring allows you to do exactly that. Compare the effect of individual risk management techniques on reducing high risk driver behaviour and measure the ultimate impact on claims volume and loss ratio.

3. Make strategic underwriting decisions

Depending on your appetite for risk, you may wish to underwrite a fleet with a poor claims history. Through manual effort, you may occasionally be able to identify cases where this is due to an anomalous claim but, in most cases, you’ll be left at risk of negatively impacting your loss ratio.

Having a standardised set of driver behaviour data across all of your polices allows you to identify a standard of driver behaviour that generally results in a positive loss ratio, allowing you to insure at your sweet spot. It also allows you to optimise your time by focussing on reducing your risk in fleets which are flagged as being above your established baseline.

4. Automate pricing decisions

Gut feel may work great, especially if you are working with an experienced team. But, once you’ve established a link between claims and the behaviour of drivers on your cover, why not factor this into your ratings tool?

By doing so, you can reduce the need for human judgement and identify high risk fleets before you add them to your cover. Plus, should you decide you want to start offering Pay How You Drive (PHYD) schemes, if you don’t already, you will have the infrastructure you need in place to start doing so immediately.

5. Increase your total available market

Recommending or mandating specific cameras and telematics as a way to access preferable pricing may work as a short-term strategy, and potentially even offer additional benefits if you have a partnership with the TSP.

However, with the majority of new vehicles now leaving the production line with installed telematics and many fleets reluctant to swap out their existing tech which they may have invested heavily in, mandating kit is becoming an increasingly less viable strategy.

Tech agnostic driver risk scoring allows you to retain all the benefits of having a unified overview of driver risk while also expanding your total available market. You’re able to insure any fleet which meets your risk profile, and build value and loyalty by demonstrating that you are responsive to market changes and implementing solutions to remove barriers for your clients.

So, how can you go beyond claims history to get an accurate assessment of your risk exposure?

  1. Work with your clients, TSPs and OEMs to come up with a list of data points you need and agree a process to gather this data on an ongoing basis. Then, develop an algorithm which aggregates and standardises this data so that you can use it as part of your underwriting process.
  2. Find an existing tech agnostic data solution that already does all of this for you.