You Should Know Better

Telematics continue to proliferate. Certainly, the ELD mandate was an impetus for increased adoption in the trucking space. A recent ATRI survey shows 86% of respondents are using telematics to manage their fleets (including admirably using the technology to improve safety).

ATRI’s figures track closely with what we see in the trucking part of our portfolio. However, trucking only accounts for roughly half of our business. The balance is a wide array of commercial auto classes (and insurance entities: MGAs, E&S, Admitted, Regional, National, etc.). Interestingly, the majority of the non-trucking accounts who enroll with us had pre-existing telematics.

At what point does telematics officially become “state of the art”? Personally, I am not sure of the precise answer to this, but it seems that we are close to that stage. However, this piece is not intended to debate whether there is an expected duty to have telematics in commercial vehicles. Instead, it is intended to highlight what is happening as telematic adoption continues to increase.

New challenges exist (and are growing) that merit strong and diligent attention

A few weeks ago, we were approached by a defense attorney with a request to serve as an expert witness. Without wanting to divulge sensitive information, at a high level, the request stemmed from a matter where the attorney is defending an insurance provider and its insured against the plaintiff’s accusation that the defendants should have done more to correct unsafe driving due to the telematics data that was available to them.

Following this, a recent article in Commercial Carrier Journal highlighted similar allegations and exposure. The article focuses on some of the emerging considerations as camera manufacturers expand their use of AI in their offerings. In particular, the article highlights the potential exposure associated with “false negatives” citing statistics that show roughly 30% of AI-triggered event footage contains secondary risks the software failed to flag. The article notes that lean safety departments often rely on pre-filtered dashboards, leaving unflagged footage unreviewed (a burden we explored in our August post, Too Much Information).

Importantly, the CCJ piece also recognizes that failure to catch an event or pattern of events does not constitute a viable defense. To reinforce this point, the article references a recent case out of Philadelphia. In Clemmons v. Lehr, the driver’s habitual speeding was known (or should have been known) via telematics data, yet the speeding remained unaddressed. The jury returned a $26,000,000 verdict, built largely on that history of unaddressed speeding. Fortunately, a judge opted to back down the punitive damages in this case, but relying on other jurists to do the same seems more like hope than strategy.

Interestingly, Morgan & Morgan, listed as co-counsel for the plaintiff in the Clemmons case, recently announced plans to invest $1,000,000,000 in AI (yes, that is billion with a “B”). With plaintiff firms making that sort of commitment, it is difficult to envision this path of attack going away anytime soon.

Returning to our experience, we are seeing commentary in reinsurance circles related to similar claims where failure to take action on available data resulted in large negative outcomes. A recent A.M. Best report notes that historically umbrella pricing has closely tracked general liability pricing, but more recently commercial auto has begun to hold more sway on umbrella pricing. While broader social inflation issues are at play with this shift, the trend also lends credence to reinsurers paying greater attention to auto’s influence on umbrella loss costs.

“The fallacy is, ‘We can prevent discovery by not looking at it.’”
Doug Marcello, trucking defense attorney, as quoted in Commercial Carrier Journal

From Data to Action

So, what to do? We have believed from the beginning (and continue to believe) that Data Without Action Does Not Drive Results^®. A quality telematics provider enables fleets to cut through the data deluge and helps them to identify, and importantly address, lurking issues – from disconnected devices to risky driving behaviors.

If you are managing vehicles, this should be your minimum standard in provider selection. A quality provider will also help you to understand where potential gaps might exist in technology and help you to determine what is safe to turn on, what might need extra vigilance, and what might create more problems than solutions.

If you are an insurer or MGA, it would be prudent to understand what data your insureds are capturing from their telematics programs and what they are doing (or not doing) with it.

To act or not to act? That is no longer a question – unless you want to get your checkbook out.