Fleet Safety Data: Driving Serious Returns for MA Contractors

January 16, 2018
Written by C&S Insurance

Fleet safety data is essential for any company looking to control costs, esepcially business insurance premiums.In the era of big data, company leaders routinely leverage numbers to fuel strategic growth and innovation. But the most important BI focus area may be flying under your radar…

Are you using fleet safety data to control employee benefit costs? Optimize employee retention? Save money on your Massachusetts business insurance? If not, keep reading to see how we can help.

The High Cost of a Mismanaged Fleet

Transportation incidents lead to more on-the-job fatalities than any other type. In 2016, roadway incidents at work accounted for 2,083 deaths—more than twice the number of deaths caused by falls. Fatal roadway incidents are also on the rise, according to U.S. Bureau of Labor Statistics data, which shows a sixty percent increase over 2015 totals.

The National Safety Council’s Injury Facts report echoes the concern, highlighting transportation incidents and business continuity issues. In 2013, employers experienced more than 44,000 incident cases resulting in lost work days. This makes transportation accidents the fourth leading cause of productivity loss, following an injury.

Then, of course, there are the insurance implications. Vehicle-related incidents and violations quickly add up in the eyes of commercial insurance carriers. When the risk level becomes too high, carriers bring in reinsurers, and companies wind up with “ceded” policy rates, which are often thousands higher than standard policy rates.

Digging out of a ceded insurance position can mean years in the penalty box. When companies get to this point, they’re either looking to hire a full-time risk management executive (with major costs for recruiting, salary, benefits), or they’re simply resigned to accepting insurance hikes. But there’s also a third option.

Fleet Safety Partnership Paves the Way for Savings

Together with experienced fleet safety experts, C&S Insurance is perfecting a collaborative approach to transportation risk management. Part of what makes this new option unique is its scalability. Insured clients can contract with safety consultants based on their budgets and operational needs. In the end, our loss control services take companies out of ceded policies, reduces roadway incidents, achieves regulatory compliance, and delivers major returns in the form of safer workplaces and employee satisfaction.

Putting Data in the Driver’s Seat

Creating a custom set of fleet safety policies is job one. Our consultants start the process by gathering company-specific data from a variety of sources: insurance loss runs, reportable injuries, roadside inspection reports, and a Safety Measurement System (SMS) report from the Federal Motor Carrier Safety Administration (FMCSA), to see how a given client compares to similarly-sized/structured peers.

There’s a plethora of information available: driving records; compliance violations; CSA scores: all of these are directly correlated to a company’s collision risk. All too often, however, the data isn’t making it to the right audience. Together with a fleet safety expert, business leaders can get a clear picture of their risk profile, and zoom in on the operational changes and training needed to yield the highest return on investment.

A quick look at ATRI research proves the point. The American Transportation Research Institute (ATRI) correlates commercial driver data with future crash predictability. ATRI’s 2011 report reveals, among other compelling points, that a truck driver’s failure to use a turn signal increases his or her likelihood of a crash by 96 percent. Cell phone use, speeding, and previous collisions are also strong indicators.

Insurers put a lot of stock in these data points, too. Companies that can show they’re applying fleet safety research to hiring and operational decisions can secure better rates. At C&S, we outline these efforts in our clients’ insurance narratives; it makes underwriters significantly more confident.

Getting Fleet Safety in Gear

Still, fleet safety program implementation is not without a few roadblocks. Management buy-in is a big one; not recognizing there’s a problem is even more fundamental. A surprising number of company leaders aren’t aware of the violations their operators are racking up, or even how many vehicles comprise their organization’s fleet (think graders, loaders, pickup trucks; not just tractor-trailers).

Sometimes key data is siloed in disparate departments. Human resources, for example, may not be sharing information on employee issues outside of work. Payroll may not be contributing valuable metrics on hours logged. Partners like C&S Insurance and risk management consultants are adept at aligning these sources.

After creating a framework with procedural documentation, clearly defined roles and responsibilities, C&S consultants then dig into the hiring process, along with training needs. Here again, safety recommendations are carefully tailored to address an organization’s specific risk profile and the types of losses it is seeing. Experts are available to teach defensive driving techniques, pre-trip inspection protocols, and remedial training following a collision.

Commissioning veteran commercial truck drivers as teachers goes a long way toward overcoming another big hurdle: disengagement. Successful risk management can’t happen from a cubicle; it has to be hands on. And you can’t talk the talk if you haven’t walked the walk—or driven commercially, as it were. When drivers become engaged, that’s when companies start to see real benefits.

ROI Both On and Off the Road

Our fleet safety formula delivers on multiple fronts: enhanced compliance, safety performance, reduced turnover, and improved operations. But insurance savings is often the initial draw.

Like workers compensation insurance, commercial auto insurance is based on an experience modification factor. Collisions and citations bring that number down, costing companies more in insurance rates. Our one-of-a-kind partnership is helping contractors dramatically reduce rates and out-of-pocket costs. It’s allowed us to secure coverage through carriers who might have otherwise turned a company down. In some cases, our insureds are seeing six-digit savings.

Keeping workers satisfied and engaged is another key benefit—especially in the current job market. A 2014 survey conducted by AGC found that 25 percent of construction companies were turning down work because they didn’t have the manpower to complete projects on time and under budget. The Department of Labor’s job site estimates a 13 percent increase in construction openings, heading into 2024. In Massachusetts alone, companies will need to fill another 580 laborer roles in the coming years. Meanwhile, according to industry analysts, turnover rates are nearly 40 percent for construction employees under age 25.

With a safety program in place that empowers and validates professional drivers, construction companies can retain the kind of people who are invested in doing a great job. This results in a better operation, lower risk, and ultimately—based on our experience—a striking success story.