Insurance providers charge premiums based on expected losses, and they expect commercial fleets to be at higher risk for loss. Tech company Idelic’s mission has always been to help commercial fleets produce better insurance outcomes by predicting and mitigating risk, reducing preventable crashes and lowering losses.
But that has traditionally been difficult for fleets in the standard insurance market.
“They had to reduce and lower accident frequency, lower losses and then go back and hopefully convince their insurer to give them better outcomes,” said Hayden Cardiff, Idelic founder and chief innovation officer. “We started to see that it took several years – four to five years of consistent lower loss history – before the insurance providers would switch over from, ‘Hey, this could be an anomaly’ to ‘No, this is actually a trend. Let me give you better rates for it.’”
Because that delay presents a big challenge for Idelic customers, Idelic decided to branch into the insurance sector itself.
Idelic has launched a tech-driven managing general agent (MGA), Idelic Insurance Agency LLC, focused on providing commercial fleets with customized insurance coverage and pricing that is reflective of risk improvement resulting from use of the Idelic Program.
The idea behind the new offering is fleets can use Idelic’s Safety Suite and Driver Safety Playbook to lower losses and, in turn, receive lower renewals based on the results.
The Idelic Program is made up of two primary components: driver performance management platform Safety Suite, which first aggregates driver risk data and identifies high-risk drivers using proprietary machine learning models; and the Driver Safety Playbook, a guide to engaging drivers through coaching and step-by-step professional development plans created in collaboration with insurers and trucking’s safest fleets.
The Idelic Program has a proven impact of a 20% reduction in preventable crashes within the first year of use by providing insight into driver data.
“Compared to traditional insurance companies, the amount of information Idelic has is like comparing a 90s flip phone to a modern smartphone,” said Michael Gramm, Idelic Insurance Agency’s senior vice president of insurance. “They’re both cellphones, but there’s a world of difference in terms of what they can do for the user.”
Gramm said, in a traditional sense, fleets would spend a ton of time compiling their data and working with their insurance provider to package that data in a way that would be well received by the underwriting community.
"Commercial auto fleet insurance is inherently complex with a multitude of nuances from fleet to fleet. The process of evaluating risks has traditionally relied on underwriter experience and judgment, but insurers are increasingly looking for a more data-driven way to evaluate risks. Idelic Insurance Agency will do just that,” Gramm said in a news release. "By working closely with fleets that choose to use the Idelic Program, we can better leverage critical driver behavior data to quote policies that reflect their reduced crash risk."
Some traditional insurance companies may offer tech solutions to help drivers lower their premiums, but the point of sale will always be insurance, he said. Idelic’s core business has been and will continue to be selling the Safety Suite platform on a subscription basis, directly to fleets.
Gramm said that is what sets Idelic Insurance Agency apart, and the company is taking part in leading an industry-wide transition as tech-based companies that provide solutions like AI dashcams and telematics move into the insurance space or partner with an existing insurer.
“We are seeing an absolute evolution happening across the insurance industry where insurance is going from a repair and replace model post-accident to the idea that insurance companies have such a vast understanding of risk across different classes of business – in our case the commercial transportation space – that we have the ability to help predict future risk and partner with our customers to prevent that risk, and then still cover losses that happen outside of what we're able to predict or prevent,” Gramm said. “We're really seeing that change the landscape dramatically, both in personal insurance and commercial insurance, where we have this evolution of partnership rather than just paying for losses after they happen.”
Cardiff said Idelic considered partnering with an existing insurer as a data provider but ultimately chose to partner as an MGA with a large national insurer so it could have a stronger hand in the process and be able to better guide customers in managing risk.
“It really comes down to the fact that insurance carriers have heartburn working with newer companies who've never been on the insurance side. It's also a little bit of a challenge to ingest new data that they've never seen before and be able to quickly turn that around into actionable underwriting insight,” Cardiff said. “For us, it was a little bit of a challenge to get the movement as quickly as we would have liked for our customers within the traditional insurance market, so we found a way to be able to provide that value as quickly as possible for our customers, and it was through the MGA.”
He said the amount of data available to fleets is like drinking from a firehose, and fleets aren’t always capable of encompassing that information and harnessing it to their benefit. But harnessing that data to improve driver coaching, compliance and safety management, among other things, in a uniform way is what will save them in the event of a nuclear verdict-producing accident.
Using the Idelic program, Cardiff said, will help the company understand how to better underwrite fleets for those cases.
Because of the rise in nuclear verdicts, insurance costs and availability are plaguing the trucking industry, landing insurance on the American Transportation Research Institute’s Top 10 list of motor carrier executive concerns.
Cardiff said current Idelic customers have been able to predict more than 60% of preventable crashes with drivers who are at the top of their Driver Watch List, an Idelic feature that scores drivers based on analysis of over 40 billion miles of driver behavior and over 215,000 accidents.
“When you pair that level of proactive and predictive insight into this programmatic approach on how to coach … now being able to tie in that proactive and predictive pricing from an insurance perspective, the best fleets are going to be the ones who win in the end,” he said. “They're going to win because normally they're having to pay for fleets who are above average in their losses. So they are typically overpriced, and now better fleets, who select a program like Idelic, can get better credit for that.”