Q&A: Insurers harness big data to better serve commercial fleets

Q&A: Insurers harness big data to better serve commercial fleets

 

A 20-year veteran of the insurance industry, Magi has held positions of increasing seniority in a range of capacities within the property-casualty insurance segment. Her current focus is on the transportation industry. Magi was most recently national director for transportation at Zurich Canada, where she was the strategic business lead for the overall direction, development, profitability and growth of a $100 million multi-line trucking portfolio. At The Guarantee Company, she is responsible for exploring a range of segment, product and distribution strategies. Founded in 1872 in Canada, The Guarantee Company is a leading provider of specialty insurance for North America. Magi talked to TU contributor Susan Kuchinskas about moving commercial telematics beyond simple operational benefits.

 

First, tell us about yourself and your role within The Guarantee. 

I am involved in developing new growth initiatives. In my previous job, I ran a long-haul transportation portfolio for a global insurer. In the area of transportation and insurance, most heavy commercial long-haul trucking entities are quite familiar with and aware of telematics. I'd say a good percentage of them are using some form of telematics and have been for years because of their qualifications for going across the border, and also to minimize their operational expenses – whether by geo-tracking or using satellites.

What are some of the opportunities for insurance telematics and other kinds of commercial telematics in Canada?

Insurance telematics is a hot topic right now.

For passenger vehicles, there is a set number of analytical criteria, like the age of the driver, the type of vehicle or whether [they do] any hard braking. You can put these attributes into a nice grid and develop a per-trip, per-mile or per-month premium on that.

The technology on the commercial side allows for [much] broader data sets to be captured and subsequently analyzed. I call it the web of telematics: in-cab monitoring of the drivers; satellite technology that monitors the trailer, the tractor, or both, and includes [things like] driver speed or whether they've gone off route.

Also, new applications are appearing to keep up with legislative changes in North America, including the necessity to have electronic onboard reporting for driver logs, hours of service. This results in a huge amount of data.

Aside from managing the data, what are the additional challenges involved in creating commercial telematics services that include insurance aspects?

The challenge from the commercial side is how to gain access to that data in a truly manageable method, one in which customers don't feel they have Big Brother watching them, but [in a form that allows us to] utilize the data for what [our customers] want us to do: evaluate them as a better risk.

The problem is that most commercial customers have bought into telematics from an operational cost perspective. Being able to use that data from a behavioral change perspective is a challenge.

Also, the system that takes that data and automatically triggers the need for training or a discussion with a driver isn’t necessarily there. Even more glaring is that companies that have been involved with telematics from the operational standpoint have made a technology investment that may go back 10 years. They may have different monitoring systems in different parts of the fleet, [and] they may have systems that don’t work together.

The ability to monitor driver behavior and access that data can be good for everyone. It gives you insight into who the better drivers are and who will have fewer claims dollars spent. The trick in commercial insurance is identifying what the important data sets are. Insurance companies' own systems may not be built to accommodate the analysis of that much data. (For more information on insurance telematics and commercial fleets, see Insurance telematics and the fleet sector and Fleet Telematics: Creating synergies with the insurance industry.)

Where is the opportunity in this market?

I see opportunity in being very crisp as to the type of customer you want to serve and target. In other words, it’s not just about [competitive] pricing. It’s also about our ability to guide our customers to get the most out of their data.

How are you helping [customers] use their data better? How well are you guiding them on safety/compliance and driver performance? How are we, as insurers, helping customers bring drivers on board so that the drivers [themselves] want to see their [performance] data on a monthly basis? How do we help customers become better performers than carriers not investing in telematics?

These are all ways how insurers can benefit their customers. (For more information on big data in insurance telematics, see Insurance telematics and the value of data.) 

Susan Kuchinskas is a regular contributor to TU.

Magi will be speaking at the Insurance Canada Conference (18-19 March), alongside Telematics Update Director, Precksha Saksena-Sood. Take a look at the full agenda and speaker line-up here.

For more on insurance telematics and commercial fleets, see Industry insight: Insurance telematics and Industry Insight: Fleet Telematics.)

For the latest on insurance telematics, visit Insurance Telematics Europe on May 7-8 in London.  

For all the latest telematics trends, check out Telematics for Fleet Management Europe 2013 on March 19-20 in Amsterdam, Telematics India and South Asia 2013 on April 17-18 in Bangalore, India, Data Business for Connected Vehicles Japan 2013 on May 15-16 in Tokyo, and Telematics Detroit 2013 on June 5-6 in Detroit.

 


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