Progressive taps into ELD data in quest to better align insurance premiums with risk
With ELDs in nearly every truck, it was only a matter of time before insurance companies started to utilize the devices. Progressive (NYSE: PGR) is among the first, launching a new discount program for truckers that provide Progressive access to their ELD data.
The Smart Haul program is billed as a “user-based insurance (UBI) program,” but it is not designed to be Big Brother. Dave Lubeck, a business development consultant with Progressive, tells FreightWaves the program, believed to be the first UBI program in the commercial truck space, is not a replacement for traditional insurance, but is a separate offering that provides truckers an opportunity for a 3% discount on the commercial auto policy premium.
“Usage based insurance is a rating model that lets us use driving data to accurately price drivers and offer savings based on safe driving habits,” Lubeck says. “Smart Haul was created with heavy truck driver data and utilizes information already collected by the ELD as part of the Federal Motor Carrier Safety Administration’s final ELD mandate. We work hard to provide the most accurate rates for each risk, and this information will help us to offer our most competitive rates for the safest drivers.”
Smart Haul is compatible with all ELD devices, with some drivers able to achieve a discount even greater than 3%, Lubeck says. “If driving history warrants, higher savings may be available through vendors with whom we have agreements allowing us to access the data,” Lubeck says. “We continue to build partnerships with various vendors, and already have existing contracts with some of the leading ELD vendors in the market.”
Progressive collects different data points from various ELD vendors, Lubeck notes, but typical data collection includes vehicle speed and time information, vehicle identification number, location, vehicle diagnostics information, as well as when the device is connected and disconnected from the vehicle. If data such as hard braking and route taken is available, that is also collected.
“Once the customer’s consent is provided, we contact the ELD vendor and they provide the customer’s most recent driving data to us,” Lubeck explains. “We’re just collecting enough data from the ELD to be able to provide a more personalized rate based on their driving habits. When the driving data is analyzed we are looking at the collective information once per year, and not constantly monitoring a driver.”
Before launching the program, Progressive ran a compensation-based test of it. Lubeck says that the program is just another tool in Progressive’s approach to improving the insurance process for fleets and owner-operators.
“Progressive is constantly looking for ways to better quote and reward our customers. When programs are new and different, there are always questions,” he points out. “Each day we are finding that more and more truckers are enthusiastic about being rewarding for something they can control, their driving habits. We’re excited to provide truckers the opportunity to save money on their insurance, which can be a big part of their overall expense.”
Progressive says that a typical customer providing ELD data could potentially save $1,384 per year on their policy. On the consumer side, Progressive has run a similar program for a couple of years called Snapshot.
Lubeck says Progressive has several safeguards in place to protect the customer’s data but having access to the data allows Progressive to price policies more appropriately, giving an advantage to safe drivers.
Any trucker on a non-fleet policy is eligible if they are a Progressive customer. Fleets must have fewer than 10 vehicles to be eligible.
“We built Smart Haul around these small operations who love to drive and that keep America moving,” Lubeck says. “Now there is a way to reward the good drivers, the best drivers with safest driving habits. Every driver will tell you they are a good driver. Smart Haul lets us provide the best rates to the safest drivers, for something the trucker can control, what kind of driver they are.”
Article Courtesy of Freightwaves