Pay it forward

Insurance providers and carriers reap rewards from technology

Of all the technologies available to manage safety and compliance, do any qualify for instant discounts from insurance providers?

For years, the answer has been resoundingly no. Traditionally, insurance companies have looked past technology to evaluate risk based on your claims history. Few, if any, have been willing to offer discounts to carriers that use specific types of technology.

About five months ago, Martin Transportation Systems added a feature to its onboard computing and mobile communications system. The feature, SpeedGauge, is a Web-based service that records speed violations by comparing speed and location data captured from onboard computers to the posted speed limits by road segment.

Management receives daily and weekly speed violation reports automatically through e-mail. With this information, Martin Transportation Systems sends compliance letters to drivers with the most violations. Weekly reports are posted in the office for everyone to see how drivers rank.

“We haven’t had enough time to really see if it is preventing accidents,” says Brett McGovern, vice president of operations for the 500-truck dedicated truckload carrier based in Grand Rapids, Mich. What the company has seen is a 22 percent reduction in the number of roadside inspections triggered by speeding. “That decreases the chances of being pulled over.”

CSA scores of carriers are being used to determine risk and calculate premiums.

With fewer inspections, the company has been able to lower its scores in the Federal Motor Carrier Safety Administration’s Compliance Safety Accountability program. According to CSA roadside inspection data, 32 percent of all roadside inspections are triggered by a speeding event. Another 32 percent are triggered by observable defects such as lighting.

Insurance providers are beginning to use CSA scores of carriers to determine risk and calculate premiums. Lower CSA scores is one of several areas of improvement that Martin Transportation Systems hopes will result in reduced insurance costs.

“We let (our insurance company) know this is something we’ve purchased,” McGovern says. “We hope after two full years that it is something that has reduced our speeding violations. Our goal is to use it as a negotiating factor to reduce rates.”

In some cases, the negotiation already has been done. SpeedGauge and PeopleNet – a provider of onboard computing, mobile communications and fleet management systems – recently announced a partnership with Brazos Specialty Risk to provide their joint customers an instant rate discount. PeopleNet customers that subscribe to SpeedGauge will get a 5-10 percent discount on pay-per-mile auto liability insurance premiums.

The Brazos discount program is available for fleets with 15 or more power units that have electronic onboard recorders installed in the entire fleet. Monthly premiums are based on actual miles driven as reported by PeopleNet’s GPS system.