Tracking

Autos

Hi-Tech Gadgets Help Curb Losses

Vendors of these types of high tech products strive to convince the insurance industry, and businesses that purchase commercial auto insurance for a wide variety of vehicles, that they will lower both liability and property losses for insureds. But will they?

They can, experts say, but only if they are used effectively.

“First and foremost any discussion of in-vehicle technology should be preceded by a discussion of the fact that this is more about the data created by those technologies and how companies would be using and managing the data,” said Dave Melton, director of transportation technical services at Liberty Mutual Research Institute for Safety, located outside of Boston, Mass. “The hardware itself is neat and in some cases pretty exciting. But unless companies have a process and built-in procedures, policies about how they’re actually going to use the data, use of those technologies is not going to be particularly beneficial to them.”

Randy O’Neill, a senior vice president with Long Beach, N.Y.-based Lancer Insurance Company, agreed. “We are strong proponents of using any and all tools available to the managers of [transportation] companies to avoid losses,” O’Neill said, “… as long as it’s utilized correctly and the information is being acted upon, which is critical. … You can gather a lot of information with these new technologies but unless it’s being properly used-meaning that it’s being downloaded, it’s being analyzed and the result of that analysis is being acted upon-that’s the key.”

Melton said when it comes to changing driving behavior the way in which information captured by in-vehicle technology is used by management is critical, as well.

“The parenting experts would say that you need to catch your children doing the right thing so that you can encourage them to continue to do it, as opposed to finding fault all the time. Many organizations that use in-vehicle technology may typically use it as a fault-finder, as opposed to a praise and reward tool,” Melton said.

“It’s very common in human nature to sort of put up a wall when somebody says you’re doing something wrong,” he continued. Companies would be wise to use data capturing technologies as a positive reinforcement tool, otherwise they may not get the results they want to see.

Melton said research conducted at the Liberty Mutual Research Institute for Safety through focus groups of professional drivers found that it’s important that drivers be involved when any in-vehicle technology is installed to monitor driver behavior. “You really shouldn’t have a group of drivers assigned to a vehicle or given a vehicle that has technology installed that they aren’t aware of or that they didn’t participate in the installation and design of the process about how it’s going to be used. You have to tell people how they’re being measured and you have to be true to what you’ve told them.”

What’s out there?

The sky is literally the limit when it comes to the myriad technologies that can be used to capture data to increase driver safety, find stolen vehicles, instruct lost drivers on how to get back on the right path, record how many hours a driver is on the road and prevent unauthorized vehicle movement (see sidebar on page N11).

Many onboard electronic devices use satellite technology (global positioning systems or GPS) and wireless communications systems, much like those used by cell phones, to communicate with monitoring centers. Others use recording technology like tiny on-board cameras equipped with an equally miniscule hard drive to capture both driver behavior and what’s going on outside the vehicle. Various types of electronic onboard recorders or “black boxes” have been on almost all vehicles since 1996, Melton said.

According to San Diego, Calif.-based Qualcomm, companies that use satellite-based technology for fleet tracking have the ability to monitor a truck’s location for in-transit visibility of cargo transport and communications with the truck’s driver. Qualcomm, which makes an array of products that are designed to increase the safety and security of drivers, vehicles and cargo, said the typical satellite mobile communications system is relatively straightforward.

First, a satellite-linked communication unit is installed in the trucks for vehicle tracking and two-way data communications between the dispatch and driver. Data messages from dispatch are transferred over a landline communication link to Qualcomm’s Network Operations Center (NOC), which sends these messages via the communications satellite to the vehicle’s driver. The driver sends messages back via satellite communications to the NOC, where they are forwarded to the customer’s dispatch center.

According to Qualcomm, the reach of the satellite-based technology enables drivers in the most remote areas to send and receive critical data, allowing them to react to situations such as weather or traffic problems, a change in load destination, alert dispatch of an emergency situation or receive information from dispatch about an emergency or threat condition.

The candid camera

One type of technology that Lancer Insurance is bullish about, O’Neill said, is the DriveCam Driving Feedback System developed by San Diego, Calif.-based DriveCam Inc. O’Neill said Lancer has found the technology particularly useful for its limousine industry customers.

How the system works, said Doran Lurie, vice president of marketing and business development for DriveCam, is that a video camera that captures both the forward view and the interior is placed in the vehicle behind the rear view mirror. The camera is on 24/7 but the recording device, a tiny hard drive inside the camera, only records data when a trigger occurs.

“It’s triggered by G-forces-rapid acceleration, swerving or braking-the images and sound of 10 seconds prior to and 10 seconds subsequent to the trigger are captured in the camera itself,” Lurie said. “We then download to software, analyze that and play that back to the commercial driver. Or the branch supervisor plays that back and coaches the driver how to do things better in the future.”

Lancer has a program in which they subsidize the installation of DriveCam systems in vehicles they insure for their limousine policyholders. “If you’re a limousine policyholder with Lancer and you have more than five revenue units, or five limos that we insure, we will subsidize the installation of the DriveCam system up to $500 per insured limo,” O’Neill said.

He said the company finds the technology effective in two ways. One is the visual information captured by the system in an accident situation, which is valuable to the company’s claims department.

The second, the system’s use in loss prevention, “is as exciting or more exciting for the potential there,” O’Neill said. “Because when DriveCam is installed in the limo it provides the management of the company with a tremendous management tool, because of the data that can be downloaded. It tells them a lot about the behavior of the driver, it tells them a lot about the way the vehicle is being driven-fuel consumption, braking, how many times the actual system is activated throughout the course of the trip. It’s a very good driver-monitoring tool. So that really is a loss prevention application.”

Lurie said DriveCam has distributed more than 27,000 units to about 1,100 customers. The initial industries penetrated were in “three areas-passenger carrying, service vehicles and distribution of goods,” he said. Passenger carriers, such as buses, limos and taxicabs, are the company’s largest market and represent about two-thirds of its revenue.

Lurie said companies can see 30 to 90 percent improvement in losses over time with the use of the DriveCam system. “The power is in the software and the service, not so much in the camera,” he said. In addition to the camera placed in the vehicle, DriveCam installs the software for the transportation company and provides a professional services team that “works with the client with how to work with the software, how to counsel or coach the drivers, and how to track this over time,” he said.

Stealth technology

“Eight for eight.” That’s the success rate that industrial services contracting company J. Fletcher Creamer & Son Inc. has had with the Lojack Stolen Vehicle Recovery System. “Eight pieces stolen, eight recovered,” explained Lucky Abernathy, safety director at J. Fletcher Creamer. He said the company, which is headquartered in New Jersey but has construction activities all over the U.S., has experienced a “tremendous savings” with the successful recovery of vehicles and equipment using the Lojack system.

Lojack may be a familiar name to many because of its use in the personal auto market as a tool for finding and recovering stolen vehicles. But Lojack’s Paul McMahon said the construction sector is a growing market for Westwood, Mass.-based Lojack.

The system uses radio frequencies and covert technology, and the unit is placed randomly on each vehicle, never in same place, McMahon said. “There’s no tell-tale sign, no visible antenna.” Even the customers don’t know where it’s located.

Operated by Lojack and integrated with police departments across the U.S., the system has a 90 percent recovery rate nationally, McMahon said.

Though he declined to discuss the specifics of its use in limousine and taxicab fleets because of the stealth nature of the technology, McMahon said passenger carrying vehicles are a market for Lojack, especially in large urban areas, due to their vulnerability to car jackings.

“We own a lot of equipment,” J. Fletcher Creamer’s Abernathy said, “but we don’t use Lojack on everything, just on selected types of vehicles and construction equipment.”

He said his company was introduced to the technology through St. Paul, their insurance carrier at the time, “which partnered with Lojack in the late ’90s. St. Paul bought a large block of Lojack units and made them available to their insureds. After that program ceased, Creamer continued to purchase Lojack at our own cost,” Abernathy said. “When you compare it to the purchase price of a half million dollar piece of equipment, the cost of Lojack is negligible.”

He said the company had 500 pieces of equipment loaded with Lojack, adding that the recovery of one bulldozer paid for cost of Lojack on all their vehicles. The recovery of that specific bulldozer, “a massive one that had to be towed on a tractor trailer, led to the arrest of a large theft ring in Newark,” he said.

“We don’t know where they put the Lojack unit on our equipment,” Abernathy said. “They come to our location and install it.” McMahon said Lojack technology is simple and “does not need a clear line of sight it can detect vehicles or equipment in holds of ships, in garages or in ‘chop shops'” where thieves take vehicles apart in order to sell the parts or ship them elsewhere. Not all police departments are equipped with Lojack monitoring equipment, but he said Lojack has relationships with thousands of law enforcement units nationwide.

Lojack-equipped vehicles are usually recovered in less than 24 hours, McMahon said, limiting the time thieves have to take vehicles apart. A recent survey of the construction industry revealed that 90 percent of equipment owners had experienced theft and 60 percent of the stolen equipment not equipped with Lojack had been damaged. That survey, conducted for Lojack by Cygnus Business Media, found that portable generators were the pieces of equipment stolen the most from construction companies, with light duty trucks coming in second. The majority of thefts took place at the construction site.