Almost 90 percent of commercial fleets use telematics systems. Yet commercial auto insurance has posted combined ratios above 100 in 12 of the last 13 years.
Executive Summary
"An underwriter prices a risk based on fleet safety scores. The fleet has a major accident… The claims department has telematics data showing the driver was speeding—but that information never reaches underwriting for the renewal. Risk management has been sending unread safety alerts to the fleet manager for months."The scenario is one example of a pattern that Kevin Henderson, CEO of data and analytics company Indenseo, has seen emerge over his 20 years of operational experience leading telematics integrations.
Here, he explains that even though insurance carriers have invested heavily in telematics technology, integration efforts consistently fail due to operational and cultural barriers. He identifies five recurring failure modes that include departmental silos and poor workflow adoption. He argues that success depends on aligning workflows, proving value quickly and fostering cross-department collaboration.
The paradox deepens when you examine the data. While 88 percent of fleets have telematics programs, only 64 percent of carriers use that data in underwriting decisions. Meanwhile, 70 percent of fleet managers report they don’t share their telematics data with insurers, and 79 percent said they have not been asked.
This isn’t a technology problem. The hardware works. The data exists. The fleets are willing partners. But many carriers either don’t know how to process raw telematics data or their IT systems are not capable of processing raw telematics service provider data.
The failure extends beyond underwriting. While 88 percent of fleets have telematics capturing driving behavior, claims departments routinely process major losses without accessing available data. Risk management sends unread safety alerts. Underwriting prices renewals without loss history integration. Each department has data. None coordinate effectively to prevent losses or defend claims.
