LOSS CONTROL ALERT

Fleet : Managing Safety and Controlling Costs

What are Fleet Telematics?

Fleet Telematics is the interdisciplinary field combining telecommunications, GPS tech- nology, vehicular technologies, trans- portation and safety best practices and com- puter science to provide detailed real time data on driver activities and status to fleet managers. It allows fleet managers to interact with drivers and gives them immedi- ate feedback on problems as they arise.

Commercial fleet operators are increasingly turning to telematics to help them save costs and operate more safely. A properly de- signed and implemented telematics system can decrease costs while improving safety and operating efficiency. Telematics gives fleet managers the ability to more closely supervise what has historically been a large- Image: NHTSA ly unsupervised employee activity: driving a company vehicle.

How does a telematics system operate?

A telematics system uses GPS technology to monitor several aspects of a vehicle, including its current location, speed, rate of acceleration, aggressive swerving and braking, and compliance to scheduled routes. Some systems can meas- ure fuel economy and monitor vehicle maintenance status and usage. Systems can be tailored to sort data by or individual drivers. This data is recorded and stored in a database (usually web-based) and then incorpo- rated into a Fleet Management Reporting system that delivers usable data reports to fleet managers. Many compa- nies purchase their own GPS equipment and management software systems. However, most fleet managers find that it is easier, faster and more affordable to use a telemetric services company. These companies provide the hardware and management software, ongoing consultation services and other safety resources for a flat fee per vehicle.

What are the benefits of telematics?

A fleet manager can use the data provided by the telematics system to identify inefficient driving trends and prob- lem drivers (e.g., unsafe driving behaviors). The information can be used by the fleet manager to provide feedback and coaching to the drivers to improve their driving practices and habits.

√ Reduce vehicle accidents. Effective use of the telemetrics data should improve driver safety, which should re- sult in fewer and less severe accidents. Fewer accidents mean fewer driver/passenger and fewer and less costly insurance claims. Motor vehicle accidents are one of the leading causes of workplace injuries and fatali- ties. Reducing the number and frequency of accidents not only saves lives, it helps companies limit their liabilities, improve safety, and reduce costs. A telematics system provides a window into the daily safety performance and habits of drivers, allowing the fleet manager to give constructive feedback aimed at changing behavior and reduc- ing . Accidents do happen, but telematics-based coaching should improve the likelihood that drivers are more aware of their surroundings and are following company safety practices, including wearing their seat belts. On the spot driver feedback is possible through signal alerts (warning beeps or recorded messages) that warn the driver that they are speeding, not wearing a seatbelt or violating a company policy.

Fleet Telematics: Managing Safety and Controlling Costs March 2015

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√ Optimized fleet operation and improved customer service. The telematics system can improve the fleet man- ager’s ability to effectively manage their fleet. They can identify route inefficiencies, improve on-time job starts and adherence to scheduled stops, and reduce idle time, time on job/between jobs and unauthorized stops. Telematics can integrate with their dispatch and routing systems to optimize routing and improve customer service.

√ Better fuel efficiency. Fuel costs are a major fleet expense. Telematics systems can help identify and thereby re- duce driver speeding and idle time. Experts estimate that a well-managed telemetrics program can reduce fuel costs by 20 to 25% and idle time by 25 to 70%. The telematics data can show the daily routes driven by each vehi- cle. Unauthorized use or poor route planning will be easily identified. This can further reduce fuel and operation costs. Knowing where every vehicle is at any moment allows a dispatcher to quickly and efficiently reroute drivers as the need arises.

√ Reduced wear and tear on vehicles. Telematics devices can help identify costly or inefficient driving styles that can result in higher vehicle maintenance costs. Some systems can also identify maintenance issues and provide advance alerts to potential vehicle problems.

√ Improved vehicle security. GPS systems enable you to quickly locate missing, abandoned or stolen vehicles and cargo. Some systems prevent engines from starting, which reduces incidences of unauthorized use.

√ Reduced insurance costs. A properly implemented telematics system should result in fewer accidents and even reduce overall size of the fleet needed. The fleet manager can target their driver training efforts to areas that will have the most impact. This could result in lower insurance premiums over time due to reduced claim frequency and severity.

Everest National Insurance Company recognizes the potential of telematics to improve fleet safety for our policyhold- ers. The benefits of improved operational efficiency, fuel savings and increased profits translate into the potential for the telematics system to pay for itself.

We encourage our policyholders to contact a telematics service provider. We do not endorse or recommend any partic- ular service providers. We encourage you to conduct your own independent evaluation of telematics service providers, based on your current and future needs. Company’s currently providing telematics services include:

 SafetyFirst  Telogis  Orion Fleet Intelligence  Fleetmatics

Remember, Everest Loss Control offers services to help you in your loss prevention efforts. If you would like more in- formation about these services, visit our web site at www.everestregroup.com.

Loss Control is a daily responsibility of your individual management. This publication is not a substitute for your own loss control program. The information that is provided in this Alert should not be considered as all encompassing, or suitable for all situations, conditions, or environments. Each organization is responsible for implementing their safety//illness prevention program and should consult with legal, medical, technical, or other advisors as to the suitability of using the information contained in this Alert. The information contained in this publication is intended for general informational purposes only and is not intended to con- stitute legal advice or opinions. You should contact an attorney if you need legal advice and/or you have any questions concerning your obligations under any law, statute and/or code identified in this publication. ©Everest National Insurance Company 2015 CONTACT US

Westgate Corporate Center 477 Martinsville Road P.O. Box 830 Liberty Corner, NJ 07938-0830

Loss Control Department Everest focuses on specialty property and casualty insurance business Phone: 908-604-3000 and is licensed to conduct business in all 50 states, including the Dis- Fax: 908-604-3526 trict of Columbia. Everest is rated A+ XV (Superior) by A.M. Best. E-mail: [email protected] To learn more about Everest, visit our website at: www.everestregoup.com

Fleet Telematics: Managing Safety and Controlling Costs March 2015