Controlling and predicting insurance costs has become a top priority for trucking companies and their brokers. For fleets of all sizes, insurance is now a top three or four expense that is only getting more expensive due to higher claims and nuclear verdicts where juries’ awards surpass $10 million.[1]
Some companies are experiencing hikes of up to 50%. As you approach renewal, you have no idea how much more your coverage will cost next year and you’re in the dark as to whether or not a carrier may find reason to drop you. Finding new technologies to improve fleet safety as well identifying methods to predict future insurance costs is now crucial for industry survival and fleet carrier profitability.
Assessing risk the old way
Traditional insurers have historically based their prices on limited information, often using data from roadside inspections, investigations, and crash reports taken at a single point in time, which only captures 2-3% of your business operations. Insurers are basically looking at everything that is going wrong about your fleet; it is not a holistic picture of what you’re also doing right.
Most companies will have claims and accidents, but the frequency and severity varies. There are cases where a single inspection receives five violations, bumping up pricing for the next two years. There is little transparency on whether an incident or warning is going to be a big deal or not. With limited data points each year, there is no way of knowing what will impact your insurance rates at this year’s renewal and beyond.
The benefits of using telematics
In contrast to traditional risk-assessment methods, telematics offers a holistic view of your entire operation and can provide valuable insights into a fleet carrier’s real performance, beyond a snapshot in time. With telematics, it’s easy to capture real-time information about driver behavior, including aggressive acceleration, harsh braking, and erratic cornering.
Additionally, GPS technology through telematics enables live visibility into cab location and produces data to assess vehicle activity over time in areas of congestion, intersections, and neighborhoods to help ensure drivers are routinely taking the safest routes. Telematics also provides information that allows underwriters to contrast different fleet operations to see how their safety scores compare to their peers.
Analyzing telematics data
Nirvana’s Safety Platform takes in-cab telematics data and makes the numbers meaningful for companies and brokers through weekly updates and monthly newsletters. Nirvana’s Safety Platform first calculates the traditional CSA BASIC score for the fleet (See Chart 1). Then, it applies the “Nirvana Risk Score” to the mix in order to determine actual pricing (See Chart 2).
In Chart 2, a 50% threshold is average; but a 40% or less threshold is desirable. If you compare the two charts, the BASIC score makes the fleets look like a much higher risk because it rates risk factors based only on limited violations data.
The “Nirvana Risk Score” on the other hand includes more holistic data captured across time to create more accurate risk models, which factors in not only violations but also data points at which a company is succeeding, over time.
Nirvana’s Safety Platform also provides personalized recommendations to improve fleet safety, including a direct insurance impact that is classified into high, medium, and low categories. It also spells out what’s causing the identified issue, suggesting ways to resolve it, and calculating the insurance implications if it doesn’t get resolved.
This allows fleets to focus on specific areas that will move the needle the most in their safety scores. For example, if your fleet has a number of speeding violations that are driving up your BASIC score, you can address that specifically.
Nirvana’s Safety Platform in action
Fleet carriers that have found success on Nirvana’s Safety platform are the best illustration. Here are three creative ways to use Nirvana’s Safety Platform:
- Routes and routing. One fleet owner noticed a lot of their violations were coming from a single hot spot along a typical route. They decided to change this route to avoid that area in general. It didn’t create a big change in fuel or time to slightly change the route.
- Repeat driver violations. A customer determined the same drivers often had the most moving violations, as they were listed as the top three violators over a period of time. The fleet carrier initiated a coaching program for drivers with repeated violations.
- Driver onboarding. One fleet owner was able to monitor a few new drivers during their first few weeks on the job to determine whether they needed more coaching, or perhaps if they were a bad hire altogether.
With real-time data thanks to telematics, Nirvana Safety Platform can predict and control insurance costs while building more accurate risk models. It helps fleet carriers turn data into actionable insights to reduce accidents and other costly violations.
For more information about Nirvana’s Safety Platform, please visit Nirvana Insurance.
[1] Wall Street Journal.com “Surging Truck Insurance Rates Hit Freight Operators,”,” January 13, 2020.
Controlling and predicting insurance costs has become a top priority for trucking companies and their brokers. For fleets of all sizes, insurance is now a top three or four expense that is only getting more expensive due to higher claims and nuclear verdicts where juries’ awards surpass $10 million.[1]
Some companies are experiencing hikes of up to 50%. As you approach renewal, you have no idea how much more your coverage will cost next year and you’re in the dark as to whether or not a carrier may find reason to drop you. Finding new technologies to improve fleet safety as well identifying methods to predict future insurance costs is now crucial for industry survival and fleet carrier profitability.
Assessing risk the old way
Traditional insurers have historically based their prices on limited information, often using data from roadside inspections, investigations, and crash reports taken at a single point in time, which only captures 2-3% of your business operations. Insurers are basically looking at everything that is going wrong about your fleet; it is not a holistic picture of what you’re also doing right.
Most companies will have claims and accidents, but the frequency and severity varies. There are cases where a single inspection receives five violations, bumping up pricing for the next two years. There is little transparency on whether an incident or warning is going to be a big deal or not. With limited data points each year, there is no way of knowing what will impact your insurance rates at this year’s renewal and beyond.
The benefits of using telematics
In contrast to traditional risk-assessment methods, telematics offers a holistic view of your entire operation and can provide valuable insights into a fleet carrier’s real performance, beyond a snapshot in time. With telematics, it’s easy to capture real-time information about driver behavior, including aggressive acceleration, harsh braking, and erratic cornering.
Additionally, GPS technology through telematics enables live visibility into cab location and produces data to assess vehicle activity over time in areas of congestion, intersections, and neighborhoods to help ensure drivers are routinely taking the safest routes. Telematics also provides information that allows underwriters to contrast different fleet operations to see how their safety scores compare to their peers.
Analyzing telematics data
Nirvana’s Safety Platform takes in-cab telematics data and makes the numbers meaningful for companies and brokers through weekly updates and monthly newsletters. Nirvana’s Safety Platform first calculates the traditional CSA BASIC score for the fleet (See Chart 1). Then, it applies the “Nirvana Risk Score” to the mix in order to determine actual pricing (See Chart 2).
In Chart 2, a 50% threshold is average; but a 40% or less threshold is desirable. If you compare the two charts, the BASIC score makes the fleets look like a much higher risk because it rates risk factors based only on limited violations data.
The “Nirvana Risk Score” on the other hand includes more holistic data captured across time to create more accurate risk models, which factors in not only violations but also data points at which a company is succeeding, over time.
Nirvana’s Safety Platform also provides personalized recommendations to improve fleet safety, including a direct insurance impact that is classified into high, medium, and low categories. It also spells out what’s causing the identified issue, suggesting ways to resolve it, and calculating the insurance implications if it doesn’t get resolved.
This allows fleets to focus on specific areas that will move the needle the most in their safety scores. For example, if your fleet has a number of speeding violations that are driving up your BASIC score, you can address that specifically.
Nirvana’s Safety Platform in action
Fleet carriers that have found success on Nirvana’s Safety platform are the best illustration. Here are three creative ways to use Nirvana’s Safety Platform:
- Routes and routing. One fleet owner noticed a lot of their violations were coming from a single hot spot along a typical route. They decided to change this route to avoid that area in general. It didn’t create a big change in fuel or time to slightly change the route.
- Repeat driver violations. A customer determined the same drivers often had the most moving violations, as they were listed as the top three violators over a period of time. The fleet carrier initiated a coaching program for drivers with repeated violations.
- Driver onboarding. One fleet owner was able to monitor a few new drivers during their first few weeks on the job to determine whether they needed more coaching, or perhaps if they were a bad hire altogether.
With real-time data thanks to telematics, Nirvana Safety Platform can predict and control insurance costs while building more accurate risk models. It helps fleet carriers turn data into actionable insights to reduce accidents and other costly violations.
For more information about Nirvana’s Safety Platform, please visit Nirvana Insurance.
[1] Wall Street Journal.com “Surging Truck Insurance Rates Hit Freight Operators,”,” January 13, 2020.
