Technology in the Trucking Industry

Impacts of Improving Safety in the Trucking Industry and how it impacts Insurance

With the prevalence of online shopping, the Trucking Industry is booming like never before. The need for more truckers is ever present throughout the industry. The demands of the industry are forcing drivers to be behind the wheel for more days and more hours then ever. With this demand comes an immense amount of risk. These risks can lead to more insurance claims throughout the industry which can lead to rising insurance premiums. Fortunately, this rise in demand for truckers is coinciding with amazing advancements in technology throughout the Trucking Industry. These advancements, in many ways, is leading to a safer experience for drivers. Here are five ways technology is impacting the Trucking Industry and three ways technology is impacting insurance for trucking businesses.

Trucking Industry provides a service many people in the US benefit from.

How is Technology impacting the Trucking Industry?

Fuel Efficiency
Driver monitoring
Traffic Coordination
Recruiting
Comforting Drivers

Fuel Efficiency in the Trucking Industry

One major cost for everyone involved in the Trucking Industry is the cost of fuel. Unfortunately, fuel prices fluctuate from year to year. This makes it extremely difficult for businesses to predict what costs will be for their business. Because of this disparity in prices for fuel from year to year, improving fuel efficiency is of utmost importance to businesses within the Trucking Industry.

Using GPS Technology to get from point A to point B without getting lost means less time finding loads. When you consider many companies have dozens or even hundreds of drivers on the road at any particular time, costs can add up quickly. Every minute on the road saved can add to bigger profits for the company. In addition to less time looking for a load, GPS Technology is helping drivers reduce idling time by avoiding traffic jams.

The American Trucking Association (ATA) suggests that the best way to reduce fuel consumption is to reduce speed. According to this study by the American Trucking Association found a truck traveling at 75 mph consumes 27% more fuel than one going 65 mph; so limiting truck speed to 65 mph would save 2.8 billion gals. of diesel fuel over a decade. More experienced drivers know this and can save the business and the industry as a whole as much as 27% yearly by driving at an appropriate speed.

Driver monitoring

ELD’s or electronic logging devices are helping fleet managers monitor driving habits to benefit safety and fuel efficiency. Monitoring drivers with ELD’s allows companies to more effectively manage driving habits and more quickly offer extensive training to new drivers. When new drivers are evaluated remotely, it can lead to better safety outcomes and better fuel efficiency for the business and the industry as a whole.

Traffic Coordination in the Trucking Industry

With the ability to communicate and access fleet information remotely, many companies are able to improve delivery times. Drivers can now coordinating driving patterns to miss traffic and bad weather. Some technology are good enough to warn a driver about a risk they face in their blind spot in realtime. This leads to less time spent idling and less instances of Distracted Driving.

Recruiting and staffing

Technology and the internet allow trucking companies to find more drivers in more areas of the country then ever before. Many drivers find jobs through online job boards over their phone while sitting at a rest stop. Because of this accessibility, drivers and owner operators have more access to better jobs and better pay rates then ever before. Also, staffing agencies are now able to source positions out to only the most qualified drivers more effectively. The process of matching drivers with the companies looking for their skills is better and more efficient. This benefits everyone within the industry and allows the industry to keep shipping rates low.

Comforting Drivers in the Trucking Industry

Technology benefits the driver in many ways then just the efficiency of their driving. With streaming services, there are better music listening options and more ways for drivers to communicating with their family and friends while they are away from home. This adds to the quality of life for drivers who live a different work schedule than pretty much any other industry.

Truck Driver unloading his rig.

How is Technology Impacting Insurance?

Less Frequent Claims

Improvements in the Trucking Industry, through better technology, lower the frequency of claims the insurance industry has to process and pay for. Less insurance claims usually results in improving rates for multiple types of commercial insurance.

Less Severe Claims

When the Trucking Industry benefits from technology, it also results in the claims that are filed being less severe. When the claims are less severe, insurance carriers do not have to fork over as much money to cover these less severe claims. When a trend of less severe claims occurs throughout an area or an industry, it results in lower insurance premium for those states and industries.

Better Data

Technology allows insurance carriers to process more and better data. Processing data more efficiently allows insurance carriers to save time and man hours processing policies, renewals, and claims. The insurance industry has decades of data to use in order to make am underwriting decision. This data allows them to more effectively recommend coverages and limits to businesses within the Trucking Industry. Technology allows more people within the insurance industry to have more information at the hands to make decisions more effectively.

How Technology is impacting the Insurance Industry

The Insurance Industry has been Slow to Adapt to Technology

Many people within the insurance industry say the industry has not evolved since the Industrial Revolution. In some ways that is a true statement. With the introduction of several different forms of technology the insurance industry is advancing into the twenty first century. Technology has and will play a large part of the insurance industry for the foreseeable future. The insurance industry has been slow to adapt, but there the best companies are now using technology to gain a competitive advantage in both personal and commercial insurance.

Human Brain, Technology, Artificial Intelligence

Types of Technology Impacting the Insurance Industry

Wearables

Wearables have evolved far beyond wristwatches and clip-on GPS trackers. Some companies are adding smart vests and even boot inserts to monitor employees. What businesses are monitoring include heart rate, body temperature, and even the sweat rate. This helps businesses prevent employees from suffering from heat stroke or hypothermia. Motion sensors are being used to detect when a worker has fallen or in some instances when an employee has not moved for a period of time. These wearable technologies can alert supervisors or nearby colleagues of a potential danger.

Drone Technology

Insurance companies are using drones in a number of ways. One of the best ways carriers are using drones is to speed up the claims process in the aftermath of a natural disaster. Carriers will send an underwriter to an area and inspect multiple damaged properties with the drone saving an enormous amount of time in the claims process. In some instances, the underwriter can begin to process a claim even before the owner of the property is allowed back in to the area. In the future, many within the industry think the industry could use drones to view a property periodically throughout the year to record the condition of a property prior to a claim. Like most things with technology and the insurance industry, this will create new types of risks and privacy issues.

Autonomous Vehicles

Autonomous vehicles bring many different issues to the insurance industry. As autonomous vehicles work now, the insurance is held by the owner of the car. In the future, as autonomous vehicles move into other areas of the economy, the insurance industry will have to develop ways to deal with new types of risks. When a company like Uber or Lyft begin offering rides in unmanned vehicles, the liability insurance required will change. When a company like Amazon begins using unmanned vehicles for deliveries; the insurance industry, along with the states and federal government, will have to adjust how the liability involved in these vehicles develops.

Computer Technology

How is Technology Impacting the Insurance Industry

Underwriting and Claims are quicker and more efficient

Insurance is a very specific product to sell. The price for one business is dramatically different than another business for a number of reasons. Insurance agents need a lot of information about a business before they can offer a quote on premium. There are a number of reasons for this and it is a frustration for both agents, underwriters, and business owners looking for coverage. Technology is helping to streamline this process.

Technology adoption is helping to better identify fraud and other crimes

There are numerous ways insurance companies are using technology to improve the insurance process for all policyholders. No where is that more evident than when it comes to policing fraud. Wearables and smart home devices are helping insurance companies determine when someone is committing arson or when someone is lying about a crime. A good example of how technology is being used to cover up a crime is in Arkansas in 2015, man was suspected of murder. Using the Amazon Echo and the smart water heater, prosecutors found that a large amount of water was used in the early hours of the morning on the night of the murder. The prosecutors used this as circumstantial evidence to show the man was covering up the crime.

Technology

Technology Requires New Types of Coverage

Cyber Insurance

Cyber insurance is a necessary coverage for most business need in 2019. There are three types of policies that businesses may need. Cyber Liability and Data Breach Coverage are the two policies most businesses need and they are almost exclusively sold in tandem. The additional coverage some businesses need related to cyber insurance is Technology Errors and Omissions.

Data Breach Insurance deals with the first party damages to you and your business. Cyber liability deals with the third party liability a business faces to other people damaged by a data breach. Technology Errors and Omissions deals with businesses that provide or sell technology services and products. Thus far, carriers have had trouble understanding the risk factors related to cyber. For most policies, the carriers have years of historical loss information to determine the probability of claims. Most businesses have been operating over the internet for less than 10 years and a majority of that time they did not carry cyber insurance. Because of this lack of data, most insurance carriers either do not have a strong appetite for this coverage or they keep premium relatively high.

Drones and Aerial Photographs

Drones are helping the insurance industry process claims much quicker in disaster ridden areas.

In the wake of three devastating hurricanes this fall, many insurance carriers have begun to use drones and and other aerial vehicles to aide in the claims process. The use of drones have sped up the turn around time for claims processing dramatically.

Drones and Aerial Photographs

Unfortunately, this fall far too many small businesses are beginning to understand the need for protecting their small business with adequate insurance. These same business owners are also getting more familiar with the claims process between the business, the insurance agency and the insurance carrier. If they did not know before, they are becoming familiar with at this time, the fact of how crucial it is for a claim to be processed quickly. Getting victims back to everyday life can have an enormous impact on the communities impacted by natural disasters. This is what the insurance industry is striving to help the communities hurt by the hurricanes over the past few months.

Technology is helping in many ways. First, drones are helping carriers take both still photos and video to observe properties they are not physically able to visit. The carriers can use the information they get from drones, both in the form of aerial photographs and video, to create 3D images of the impacted area. Technology is now allowing them to do this at scale and determine what percentage of a property is destroyed without ever setting foot on the property. Now, this is not possible in all circumstances, but it is possible in many. Every case that is sped up, frees the adjusters to move on to other victims who desperately need help.

According to an article with the Insurance Journal, a recent KPMG (Klynveld Peat Marwick Goerdeler) Survey found, “the two biggest challenges facing insurers are the difficulties in assessing property damage and managing customer expectations”. As a result of the same survey insurance executives overwhelmingly said, ‘To improve claims efficiency and communication with customers, insurance executives cited the use of drones as one of the technologies they will utilize to help quickly settle claims’. Drones are helping with these exact problems facing the insurance industry, by allowing those within the industry to show the victims, with pictures and video, what they are doing and how they are going about doing it.

Through the use of drones many companies within the industry are able to drastically speed up the processing time for claims by allowing the insurance claims processor to get a majority of the claims process done without the ability to physically visit the property. Once they are able to get out to the property, insurance professionals can use the drone to examine several properties in a particular area in a short amount of time. This allows the claims adjuster to spend a short amount determining what properties are most devastated and will need the most of his time. It can also allow the adjuster to determine if another property does not need any further observations on his part and free up time for him to observe other areas that are severely devastated.

This is just the tip of the iceberg for how this and other technologies will help the insurance industry, better serve their clients in the future.