How telematics can help you safeguard and save on insurance

Fleet management · Jan 15, 2025

Fleet insurance is a critical component for small businesses in Canada, especially those operating within the transportation sector. As the auto insurance market evolves, growing businesses are faced with new challenges as they try to stay adequately protected while managing costs effectively. Over

one hundred thousand Canadians

are injured in road collisions each year–a trend that has stayed consistent for over a decade. This costs the economy

roughly $36.6 billion in direct and in-direct costs

* a year.

This has underscored the importance of insurance for growing businesses and, in turn, made the

rising cost of insurance

one of the primary challenges for businesses in the fleet space. This increase is driven by several factors, including the reduction in market capacity, where some insurers either exit the space due to unprofitability or impose strict underwriting guidelines. This means that many insurers are more selective, often requiring sound risk management practices from their clients. For businesses, this translates into a need for robust driver training processes, behaviour monitoring and the implementation of technologies like dash cams and GPS trackers to lower risk factors.

Telematics and asset tracking

have become essential tools for growing businesses looking to manage their fleet insurance costs. These technologies provide valuable data that can help insurers assess the safety and risk profile of a fleet. By adopting telematics, businesses can not only improve their operational efficiency but also

potentially qualify for insurance discounts

. We recently spoke to leaders from Marsh Canada, a global leader in insurance and risk management, about the importance of fleet solutions in lowering risk for businesses.

Adopting vehicle tracking solutions is becoming the norm for improving insurability in the commercial auto industry. With this new technology, insurers can now measure and watch driver behaviour in near-real-time. This allows them to get ahead of potential issues and take control of their risk management. This not only results in improved safety for drivers and other road users but also could help businesses to potentially save costs through reduced insurance premiums.

“Commercial vehicle insurance remains a challenging line of business across many insurers, resulting in an increase in insurance premiums. There are some key contributing factors to the increases in insurance premiums. One being the reduction in capacity within the marketplace, due to unprofitability or limited appetite, coupled with strict underwriting guidelines. So some insurers are willing to walk away from potential clients if they feel there isn’t sound risk management in place,” said Manish Bissa, Senior Vice President, National Transportation & Logistics at Marsh Canada.

The rise in claims frequency and severity, particularly in the commercial auto sector, has also played a role in increases. This can be attributed to many factors, including distracted driving, increased traffic congestion and the rising costs of vehicle repair and medical treatment. As a result, many insurers are being more selective in the risks they are willing to underwrite, and are placing a greater emphasis on risk management and safety measures for fleet operations.

Businesses that can track their vehicles and drivers, by using smart technologies, can get rewarded for taking a step towards driving a safer fleet. Programs like

FleetConnect

, developed by Marsh in collaboration with Geotab and Intact Insurance, offer discounts to fleets that demonstrate a high level of safety based on telematics data. Through the use of advanced technology and data analysis, FleetConnect helps insurers to better assess and monitor risk. This proactive approach to risk management not only benefits insurance companies, but also could help fleet operators improve their safety practices, reduce accidents to ultimately lower their insurance costs.

“We all agree that enabling data and using data to drive better outcomes for our clients is a good thing. Through this particular program, we look at the collision probability rating-provided by FleetConnect and work with insurers to secure a 10% discount to fleets rated in the top 20th percentile,” said Dan Carroll, National Mid-Market Growth Leader.

“One of the challenges for insurers has been data ingestion and scoring to get a better handle on the safety of a fleet in order to provide a discount or even determine whether or not a fleet should be insured at all. Working with Geotab’s Data Science group, we have endeavoured to create a model so we can provide data points to insurers and allow them to evaluate and dig deeper into the safety of a fleet, rather than solely relying on the traditional underwriting model.”

However, the adoption of telematics is not just about securing discounts. It represents a shift towards data-driven decision-making in fleet management. Insurers are increasingly expecting their clients to have access to and utilize telematics data to improve safety and reduce risks–making it clear that business owners and fleet managers should take control of their risk. After implementing new technology,

73% of fleets reported that video solutions

helped improve driver safety. Growing businesses that embrace this technology can help position themselves as a better risk, making them more insurable. Although adoption is not a regulatory mandate, it has quickly become a market-driven expectation.

“Just having telematics or asset tracking is not enough to get an insurance discount – it’s the basic expectation. The fundamental question is how this data is being used to improve safety and increase insurability,” said Matthew Yeshin, Managing Director of Global Digital Cargo at Marsh Canada.

“A lot of companies are saying ‘well, we need an insurance discount to implement telematics solutions’ when in reality it’s the other way around, you actually need telematics in order to get insurance.”

Beyond insurance cost savings, a key consideration for businesses is enhanced safety through better driver behaviour monitoring and targeted training. Customers using

Geotab’s Safety Centre

, which provides a high-level overview of the fleet’s overall safety performance and benchmarking, saw a

5.5% reduction in collision rates in just 4 months

(Feb - June, 2024). By leveraging telematics data, growing businesses can offer specific feedback and training to drivers, fostering a culture of safety and accountability. This not only reduces the likelihood of accidents but could also help to boost the overall efficiency of the fleet.

“Gone are the days of only providing drivers with generic online training courses for speeding or defensive driving. The training process has evolved, with fleets analyzing what drivers are doing out on the road and providing targeted training to address concerns,” said Bissa.

“The targeted training shows drivers that they are valued members of the team, helping to increase engagement in the process. Tailored driver coaching and mentorship is a must, regardless of the size of the fleet.”

And despite the advantages and slow shift in perspectives, some businesses may still hesitate to adopt telematics due to privacy concerns and the upfront investment required.

“We’re managing the data as we would manage any private data that’s being provided to us. We look at how that data is going to be summarized and aggregated, and then shared with the insurance companies. The other side of it is that this data is also readily available in the event that there’s an incident,” said Yeshin.

While insurance provides a safety net after an incident occurs, historical data can help you enhance and shape your business' safety programs, improving opportunities to coach drivers. With the perpetual risk of accidents, telematics can help arming you with the evidence you need to not only optimize your business, aiming to help exonerate drivers and to help limit costly litigation.

“Insurance should not be driving your business decisions. If you run a good business and you manage your risk well, the insurance industry will be interested in working with you,” said Yeshin.

“You’ve got access to the data, if you want it. We can provide guidance on insurance best practices, but really, clients should be looking at what they can do to prevent accidents and what they can improve on from a risk perspective.”

A reliable provider, like Marsh, helps growing businesses navigate the complexities of the insurance market, advises on market trends and lowering risk, and advocates for their clients to find them the best insurance options. By working closely with a broker or insurance provider, businesses can get help to stay up-to-date on insurance best practices and make proactive changes to mitigate potential risks. This not only can help benefit businesses financially, but can also help to contribute to a safer and more secure work environment.

Whether you’re a small business looking to add vehicle diagnostics, live video streaming and in-vehicle Wi-Fi to stay connected while on-the-go – or you’re a large commercial fleet in need of real-time monitoring, advanced reporting and ELD capabilities – TELUS Business has a solution that’s ideal for your needs.

Connect with a TELUS specialist

to learn more about how

TELUS Business Fleet Management solutions

and

Geotab

can help you optimize fleet performance – You may qualify for special offers and

Owner Perks

, such as exclusive fuel savings with PetroCanada’s Superpass.*

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