Improving risk management and reducing insurance costs with asset tracking

Fleet management · May 14, 2024

Understanding the importance of managing risk while keeping insurance expenses low is crucial for the success of your company. Protecting assets, such as products, goods and vehicles, can help to save you from financial harm.

According to a

study conducted by CFIB

, small businesses in Western Canada are disproportionately impacted by crime and safety challenges. 45 per cent of Western Canadian small businesses reported that they are directly or indirectly impacted by these issues, while another 32 per cent are concerned about them. Contrastingly, only 28 per cent of small businesses in the rest of Canada have faced the same safety issues.

The severity of those crimes has increased in the majority of the country, leading small businesses to increase the security of their assets, with 62 per cent of Western Canadian small businesses investing more in security. Implementing asset tracking technology into your operations could provide an additional layer of protection to aid in keeping your workers, assets and business safe.

What is asset tracking technology?

Asset tracking

is the practice of monitoring business-owned physical asset locations and health. Your physical assets can include items such as computers, generators, vehicles with valuables or other technology equipment. To track these assets, you will need to equip them with tracking devices using radio-frequency identification (RFID) or GPS systems accompanied with asset tracking software.

The importance of asset tracking technology in risk mitigation

Asset tracking technology offers many benefits for reducing operational risk, addressing the rise in theft and improving insurance costs. Our partner Geotab spoke with experts from

Marsh Canada Limited

, a global leader in risk and strategy consultancy. Matthew Yeshin, Managing Director at Marsh Canada Limited, and Bill Kalbhenn, Vice President, National Transportation Consulting Leader, shared their perspectives on the current challenges and opportunities in industries such as transportation and logistics, construction, manufacturing, retail, and IT services providers, focusing on the importance of asset tracking technology in mitigating risks like theft and improving insurance processes.

“Although the value of stolen goods might represent a small percentage of total goods in transit, each instance of theft can be devastating for the affected companies. It goes beyond the immediate value of the stolen goods. There are ripple effects on the supply chain, business interruption, and reputational risks.”

Matthew Yeshin, Managing Director
Marsh Canada Limited

Theft and loss can have a devastating impact on small businesses. In 2022, the total cost of stolen cargo in the US and Canada was

estimated to be US$223 million

(approximately CA$303 million). This not only affects the immediate financial burden for small businesses but also causes business interruptions and poses reputational risks to both the owner of the goods and the transportation company responsible for their safe delivery. While stolen vehicles often reappear, the primary target and concern is the cargo, which holds greater value. This can result in significant insurance claims and operational disruptions.

Relevant factors that can influence theft

There’s no one particular type of valuable that is the most common to be picked for theft. Thieves have a wide variety of targets ranging from food and beverage to household electronics, showing how broad the threat can be and how important it is to have a comprehensive risk management strategy.

Theft patterns can differ from region to region. Customized risk management plans and increased security measures are a necessity dependent on the patterns in each region.

Economic factors such as downturns and fluctuations in consumer trends can contribute to an increase in theft. Global economic crises, like pandemics, war or widespread civil unrest,

can also lead to a surge in thefts

How asset trackers can help small businesses

Asset trackers have advanced from basic location tools to integral components of risk assessment and management for business owners in the last few years. No longer associated exclusively with high-value cargo, asset trackers have benefits for any business needing to minimize theft.

Asset trackers are now equipped with real-time alerts to aid in rapid response when an incident, such as route deviations, delivery tracking or asset monitoring, occurs. Tracking technology can allow businesses to keep a keen eye on their assets to further theft prevention measures, reduce the time taken to recover stolen cargo, improve delivery accuracy, and mitigate security risks in high-theft areas. In some cases, it can also help reduce insurance claims and prevent costly mistakes, like delivery issues or delays, by implementing geofencing at key collection points and service centres.

"It’s more than just installing technology. It's about embedding it into your operational fabric and using it to make well-informed decisions and improve safety measures."

Bill Kalbhenn, Vice President
National Transportation Consulting Leader
Marsh Advisory Canada

In addition to improving security and asset protection, using data from asset tracking systems could lead to greater supply chain efficiency and transparency, reshaping how trade and commerce work. Systems, such as

Geotab GO Anywhere

, can help enhance visibility, streamline your operations, and help secure your physical assets. Geotab helps fleet managers answer critical questions about their assets for more efficient and reliable asset management.

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 navigate toward a smarter, safer, more sustainable future. For details about Marsh's specialized cargo and logistics insurance services,

visit the Marsh Cargo and Logistics page