Selling insurance telematics to private motorists is a no-brainer. The less or more responsibly they drive, the more money they save on insurance premiums. Fleet managers need a bit more education.
They too understand the part about saving on insurance premiums. But what they often fail to consider is uninsured losses, things like vehicle downtime, late-delivery penalties or damage to the brand, which can easily amount to twice the cost of a claim.
As a result, making the commercial sale should be as much about selling insurance cover as about big-picture risk management to mitigate uninsured losses.
"Everybody recognizes the value at this point, but the question is: 'What's the ROI?'" says Jim Noble, director of global commercial fleet services for Interactive Driving Systems, a company providing risk management services for commercial fleets through data analysis.
To drive the point home, it also helps to spell out exactly how much product a company has to sell or move to generate enough profit to fund those uninsured losses, said Andy Price, practice leader – Europe, Motor Fleet Zurich Risk Engineering.
For example, a building supply delivery company worked out that every time a driver clipped a window mirror, the company had to sell 285 bags of cement to fund the associated uninsured losses.
The final piece of the puzzle is making the drivers care. "Unlike your average driver on the street, those who drive professionally for fleets never see an auto insurance bill," Price said. "So the idea that their behavior behind the wheel could impact premiums is not particularly captivating.
"But mention that their driving performance could affect their standing with their employer? Now you have their attention. This sort of shift in perspective is what's needed to make telematics-based insurance policies more appealing to commercial fleets."
In other words, for consumers, better driving behavior or less driving equal lower premiums. In the commercial world, "[telematics-based insurance] is about fitting in with the operation and what are the value adds, not just measuring speeding, hard cornering and hard acceleration," Noble explains.
At the Telematics USA 2013 Conference & Exhibition (Sept 4-5, Chicago), speakers will discuss the commercial user proposition, plus how to align existing telematics technology with the commercial space. Topics include:
Take a look at the full speaker list
Take a look at the full speaker list.