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Trucking Turns To Technology To Blunt Insurance Hikes

Trucking companies considering deploying on-board cameras now have another reason to adopt them: lower insurance costs.

Truckers using the new Greenlight smartphone-based dashcam can get discounts on insurance products of up to 5 percent from Paul Hanson Partners, which is working with Greenlight.

That’s no shabby incentive at a time when trucking insurance is increasingly expensive and harder to get, with insurance companies such as Zurich and AIG leaving the trucking market or curtailing coverage as jury awards in accident lawsuits against trucking companies climb higher and higher.

“We’re not too far away from insurance companies forcing commercial fleets into using some type of telematics as a precursor to obtaining insurance,” said Jason Green, CEO of Greenlight. Insurers may wind up playing as big a role in the adoption of safety technology as regulators. Actuaries are going to have hard numbers on the difference in incidents for those who are using dash cams and those who aren’t. We’re getting a lot of presales and a lot of interest in Greenlight, because we tie it to an insurance discount through PHP.”

On-board cameras are just one tool that trucking companies may turn to as they try to blunt insurance costs that jumped significantly in 2016. Rising liability insurance costs are a concern to trucking operators and their shipper customers. Higher insurance costs not only put pressure on transportation rates, they threaten to force smaller trucking operators with fewer insurance options out of the business.

Green claims his company is unique in tying its forward-looking mobile dashcam and driver management system to lower insurance premiums, but he’s not the only one who sees a potential for cameras and other on-board safety systems to drive down insurance costs, or hold increases at bay.

“We’ve certainly seen an increase in auto liability severity,” Todd Reiser, vice president of transportation at Lockton Companies, said during a conference call with reporters last month hosted by Stifel Capital Markets. “In the past, worker’s compensation was more a hot button. That’s changed in recent years as claims become more severe. A million-dollar claim 10 years ago, unfortunately, now we’re finding is a three-, four-, five-million dollar claim.”

As a major trucking insurance broker, Lockton has broad visibility into the market.

“We’ve seen some major settlements and verdicts in 2015-16,” Reiser said. “One example is a $35 million jury award in a fatal truck crash in Texas. Those types of awards should concern shippers, too. Plaintiff attorneys can slap shippers with negligent hiring liability lawsuits following truck accidents.”

Reiser cited “a massive increase” in the use of on-board cameras as trucking companies and drivers gain experience with them.

“We’re finding more and more carriers are piloting cameras or have gone ahead and done the full implementation and are seeing significant impacts and frankly exonerations in cases where they may have been targeted for liability initially,” Reiser said. “As for trucking insurers making telematics a prerequisite for coverage, I see it moving more and more toward that direction. If you have all these various technologies we are sort of going to put you in a different category than those that don’t. The underwriting community has certainly embraced certain aspects of truck safety technology and for the first time … we’ve had underwriters say we will provide some sort of discount or credit as far as when and how truckers implement the technology.”

Reiser referred to lane-change warnings systems and collision mitigation systems as well as on-board cameras, but on-board cameras, in terms of cost, are an easier choice for many carriers. Greenlight wants to make the choice easier by replacing cameras with smartphones.

Replacing stand-alone cameras wasn’t what Green initially had in mind. His career has largely been focused on developing the point-of-view camera, first with a company called Twenty20 that he co-founded and later with Contour, a GoPro competitor now part of iON Cameras.  Greenlight started out as an onboard video recorder.

“I was looking at dashcam recorders. People were putting a camera on the windshield, and I thought, man, we could do this better using the phone. The big challenge was making it robust,” Green told JOC.com.  “Once we had that, we realized we had a telematics device that could capture data and video together from one source with very minimal hardware.”

A dash-mounted cradle works with iPhone and Android phones, and a mobile app converts the phone into a dashcam. In addition to video, drivers, as well as fleet managers and insurers, can see data from the system, including information on their performance during recent trips and safety scores.

“Some of our partners use the system for training,” Green said. “We will use the data to flag drivers when we see signs of a risk, hard braking, for example. We can send them training videos automatically. When they complete training it gets noted in the insurance account.”

Green initially had the consumer market in mind, and a consumer version of the product is available for $49.

“We got pulled into fleets because the opportunity is so good,” Green said. “You look at the cost of fleet operations and insurance and you can see why the need is so high.”

The initial market for the system is not over-the-road long-haul trucking, but final-mile logistics providers and local delivery companies.

“We started by looking at companies operating straight trucks and cargo vans, but we’re getting a lot of attention from the Class 8s,” Green said.

He recommends trucking companies pay their drivers an incentive to use their personal phones as cameras.

“You’ll reap the rewards in insurance costs,” Green said. “Also, a smartphone used as a dashcam is a smartphone that’s not being used for texting or phone calls while driving. Everybody knows the smartphone is a distraction. We’re putting it to work, so it’s less likely to be a distraction.”

 

Source: JOC

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