How FloowFleet is the Future of Small Fleet Management

How FloowFleet is The Future of Small Fleet Management

Article written by John Kramer

The combination of more people on the road driving more annual miles, coupled with the ever increasing problem of distracted driving, means that accidents are proving to be higher in both frequency and severity.

According to the US Occupational Health and Safety Administration, on-the-job vehicle accidents cost employers an average of $74,000, while the US Center for Disease Control and Prevention reports that the leading cause of work related deaths is automobile accidents.

As a result, commercial insurers have reported seven consecutive years of underwriting losses, with last year reaching a 16 year high where combined ratios reached 111.1%.

At the same time, loss ratios remain elevated and despite an improvement to 77.9% in 2017 from 80.5% in 2013, the industry needs to see less than 70% to reach a break-even point.

This has resulted in insurers taking excessive amounts of rate and resorting to extreme underwriting activities, including non-renewing of policies and exiting business lines altogether to try and combat these unprofitable trends.

Photo by Maarten van den Heuvel on Unsplash

Here, we see several opportunities and benefits in using telematics solutions for fleets:

For the insurer, there are many public reports and studies that demonstrate how using telematics in insurance products improve loss ratios which will help to improve overall underwriting profitability.

Also, the ability to use better tools to predict a risk’s likelihood of being involved in a claim and to accurately calculate the risk’s insurance premiums is at the heart of telematics technology.

Finally, we know that policyholders’ “like” telematics, and we’ve observed how policy retention numbers can improve when telematics is used as part of an insurance product.

“FloowFleet uses The Floow’s class-leading scoring algorithm to analyze driving behaviors with the highest correlation to risk”

The commercial insurance market is primed for fleet solutions, and there is considerable market traction:

• Aggregate market penetration of fleet operators using telematics to understand driver behavior and vehicle location is estimated to be between 40 and 60%.

• YoY growth of US insurance telematics in2018 is around 25% with strong new business adoption rates. When compared to non-telematics policies, insurers are seeing higher retention numbers, better early-term loss results, and higher Net Promoter Scores.

• There is a lot of good news and appetite for commercial fleet telematics products; however, most solutions today are specific to large fleets and heavy-duty vehicles.

• The small commercial fleet market has been underserved and neglected for years and it is estimated that the micro and small fleet segments, where there are only 2-5 power units per fleet, is poised for the greatest growth in the coming years. It is estimated that the demand for commercial UBI in small fleet is 10 percent greater than the demand for UBI in personal lines.

In addition, there are also a number of benefits for the fleet manager. These can be realized in terms of 3 key categories: savings, safety and security, and improved efficiency.

• There can be real cost savings in the form of fair, accurate risk assessment and corresponding pricing of insurance premiums. As a simple example, if a power unit is being driven only 1 time per week, the risk exposure may be significantly less than a power unit that’s driven daily, and should be priced accordingly.

• Education and awareness helps to lower the overall risk and can improve driver’s safety behind the wheel. This helps to keep vehicles on the road and operational (which also enhances savings and efficiency), reduces the chance of deteriorating brand image associated with poor driving, and can keep employees safe and out of harm’s way.

• Finally, fleet products can provide business tools to help improve the efficiency of the fleet such as vehicle location and geofencing.

Telematics can therefore play a critical role for commercial insurers, and the time is now for an affordable, flexible, reliable platform to offer UBI programs for these smaller fleets and light-duty vehicles.

Photo by Breno Assis on Unsplash

Fleet managers and insurers alike need a solution to proactively manage and reduce risk in this, a highly price sensitive market.

In response to this need, we developed FloowFleet, a cost effective, turn-key risk management platform, to help commercial lines insurers and fleet managers access the benefits telematics technology can deliver. And there’s never been a better time to focus on these benefits.

Aimed at fleets of up to 25 light-duty vehicles, FloowFleet uses The Floow’s class-leading scoring algorithm to analyze driving behaviors with the highest correlation to risk, allowing insurers to better manage their risk. It also helps fleet managers identify poor driving behaviors and address the problem at the source to reduce the chances of loss for both the business and the insurer.

“It also helps fleet managers identify poor driving behaviors and address the problem at the source to reduce the chances of loss for both the business and the insurer.”

Through an easy to use, intuitive online portal, the fleet manager can keep track of all their vehicles as well as being informed of each driver’s score across four key areas: smooth driving, speed, fatigue and time of day. In addition, geofences can be set to alert the fleet manager if any of their vehicles enter or leave a designated area of their choosing.

In addition, we have a strong roadmap of new features that are already in development, including, manager assigned curfews, crash/First Notice Of Loss alerts, an optional driver rewards program, and a driver-facing app to give vehicle operators timely visibility of their scores, which will be released over the coming months.

Our unique approach to allowing our partners to create their own Intellectual Property by building on our scores using their own claims data means there’s opportunity to create unique scores that are highly accurate and predictive across their book. This enables them to differentiate and innovate within their markets while creating a long-term, strategic asset.

As such, we’re pleased to share that we’ve already signed up several leading insurance partners who welcome a much needed solution for their commercial policyholders.