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Measuring the Right Data… Driver Behavior and Risk Assessment

Today, everyone knows that it’s important to measure what you manage and manage what you measure. That’s great, but let’s consider this… what if you’re measuring the wrong data? Or at the very least, measuring data that does not truly give you the accuracy you think you’re getting? More to come…

When GPS first was introduced to the mainstream commercial markets it was wonderful. Companies for the first time could see their field assets locations. They were empowered! Now what? Knowing where your assets was great, but then came the next level of questions… “What do I do with that data?” And so it began, the evolution of today’s modern fleet management systems and other similar telematics enabled services. We are now seeing the forward progress move into virtually every vehicle, device, and even pet.

Now, let’s consider the first paragraph again, measuring and managing. The topic is about driver behavior, safety, and risk assessment / mitigation. Today’s fleet management and telematics programs deliver a tremendous amount of value to every business that deploys them. It’s become critical to have one in order to maintain maximum productivity and to stay ahead of competitors. One of the functions many systems have today is ‘Event Based’ tracking of driver behavior. This enables a fleet supervisor or other key member evaluate, both in real-time or after the fact, how many times a driver performed a harsh-braking maneuver, or harsh acceleration, or aggressive turn. And this is good… sort of. Events give you only a sliver of information that an event occurred. But what it doesn’t tell you is anything about the event itself, if it was a severe or very minor event, or the duration of the event. Also, what event based systems don’t tell you is how the driver performs when there are no events. The assumption is that they drive well, but how well? How do they compare to the other drivers in the fleet? You can start to see that measuring and managing those ‘events’ can possibly be an exercise in measuring data that does not really tell you the true or accurate story. It’s like measuring birthdays. It’s great to know you had 50 of them, but which party was the best, or worst? How well did they live each year between birthdays? Knowing the count doesn’t really tell you the real story.

With the evolution of technology so comes the promise of newer and better software and resulting data. We’ve all been witness to newer, better, faster, unique applications on the market. Just look at your hand-held device. Because we’ve measured things one way before doesn’t mean we have to keep doing it the same way if there is something better and available. Many are aware of the UBI Insurance programs that are offered to individual consumers today. Put in an OBD device in your car and let the insurance company get information about how you drive. Only problem is that it’s self-selective, meaning only the good drivers are opting in due to the potential discount via some type of ‘loyalty program.’ In general, they only measure how many miles are driven, time of day, and maybe speed. The movement afoot is to further the evolution of UBI to what we are calling RBI, Risk Based Insurance. With the further advent of very detailed and accurate driver behavior software, being able to assess risk takes on a whole new meaning for both fleets and insurers.

Specialty fleet insurers are showing genuine interest at the prospect of having driver scoring software that provides them with details that are expressly related to driver behavior and potential risk assessment. There have been significant discussions regarding their interest in potential cost sharing, which often times can cover much, if not all, of the cost for the entire program. Consider that the cost of insurance premiums for a fleet driver potentially being on the magnitude of 2-3x or more on a yearly basis when compared to the average consumer, especially since the cost of claims can proportionally much higher. Not to mention fleet vehicles can be much more expensive to fix after being in an accident. In addition to all of this there may be a reduction in maintenance related costs for vehicles driven by better drivers, as well as a reduction in the overall fuel expenses. Add all that up and you have much more of a reason for fleets to invest in understanding and improving their driver behavior. When you combine a new driver scoring model along with the proper driver training and improvement programs you get a very sophisticated and effective way to safeguard your drivers, your vehicles, and corporate assets. If you’re going to invest your time managing metrics related to your driver’s performance make sure you are not measuring just a very small slice of the overall picture. Much like a puzzle, one piece doesn’t show you the full picture.