Telematics

Impact on the motor fleet insurance industry in Cyprus.

The insurance industry and its corporate clients have traditionally viewed the insurance programs of their motor fleets as the necessary evil, a compulsory third party liability insurance in most developed countries, presenting a cumbersome task that they will have to go through year in and year out with the insurers on an annual basis.

We all have been part of endless meetings with clients, insures and brokers, each trying to justify high loss ratio caused by frequency and severity of claims and in most cases no one could provide a good reasoning of why next year will be any different.

Usually support of other non-motor profitable lines of insurance will be the common ammunition for all parties involved in an effort to constrain the premium increase of the motor fleet to the minimum. In the end, everybody will walk away with a sense of satisfaction in sharpening their negotiation skills and control of our egos of a job well done.

Telematics presents a breakthrough. A game changer a force of positive change our own Jedi knight in the motor fleet insurance business that will contribute to the permanent landscape of how a modern motor fleet should be managed. In its most simplistic form telematics represents the heart rate the pulse of the driver by providing the ability to monitor the drivers’ behaviour, the most important asset of a motor fleet.

Telematics is utilising the technological advancements through a chip that is installed on each vehicle and integrated with a software that is able to track, monitor and extract data that will lead to a step by step progress measurement of the driver’s efficiency and its progress towards the optimum efficiency.

The return on investment from telematics has an impact that goes beyond just the insurance field and is based on 24/7 real time data that can be generated from telematics reports. A few examples of the telematics impact on the insurance industry and beyond can be derived from the:

  • Increase safety of driver by reducing accidents of severity and frequency
  • Monitoring the speed of all the fleet vehicles
  • Reducing theft incidents since tracking of vehicles is a standard telematics feature
  • Identification of high risk drivers through speeding’s and harsh cornering
  • Recognizing heavy braking wile approaching traffic lights
  • Minimising idle time of vehicles
  • Improving logistics by delivering goods based
  • Reducing goods theft
  • Lowering vehicles maintenance as the frequent change of tires
  • Savings on fuel costs that can reach up to 30%
  • Minimizing fraudulent claims by cameras installed on the vehicles
  • Assisting in capturing accidents and allocating liability at a more accurate way
  • Lowering Insurance Premiums

Our experience has shown that the contribution of management through its active involvement in embracing a telematics program is paramount to its success.

Management should be able to present in a clear and precise way to its drivers the benefits accrued for the implementation of telematics and the value that will add by improving their safety first and helping the company to be more efficient.

There have been paradigms of sophisticated, most expensive telematics software to be purchased but failed to deliver considerable results and this has in most cases been attributed to the lack of attention by the management combined with the poor explanation of its benefits to their driving force.

Examples of launching a telematics programme without being candid with your employees about it and explaining at the utmost detail their value to them are simply doomed to failure. On the other hand being reward of improved driver behaviour publicly and sharing of the vison of telematics for the organisations as a whole has delivered impressive results almost in every benefit that has been mentioned previously.

Insurance companies will now have the opportunity to assess a motor fleet based on scientific real time data including monitoring of drivers behaviour. Discussions with the clients will be focused on how we can improve more within the next months and the results will be fair premiums for the clients and fair profit margins for the insurers.

Telematics may not be the answer to everything but is definitely as innovative as it gets when it has to do with an industry sector that has faced years of stagnation. In our opinion telematics is the present and the future that will enhance the sophistication of pricing a motor fleet and align common interest with the clients.

Sources:

1. https://www.accenture.com/bw-en/insight-insurance-telematics-game-changer.aspx

2. http://meconstructionnews.com/story/5420/oil-and-gas-companies-can-boost-road-safety-with-telematics

The opinions and positions expressed in this report are not intended to provide legal or other expert advice. It is presented as information only. Readers should consult legal counsel or other experts, as applicable, with any specific questions they may have. Any references to insurance policy provisions are not intended to amend or alter any final policy or contract. The terms and conditions of the ultimate, final policy or contract will govern the rights and obligations of the parties

kyriakos kaloyiroy managing director of niche insurance brokers

by Kyriakos Kaloyirou - Managing Director, Niche Insurance Brokers Ltd

Kyriakos Kaloyirou is the co-founder of Niche Broker Insurance Ltd; a company involved in the sale and designing insurance solutions for corporate clients. Kyriakos has over a decade in the Insurance industry and by now Niche now is establishing a long term profitable relationship with a selective panel of insurers by utilizing technology in order to deliver solutions with speed and flexibility to Niche clients.