Insurance firm proposes financial incentives to encourage transporters to install in-vehicle tracking technology
By Brad Gardner | July 27, 2010
Trucking companies should be given financial incentives to encourage them to install in-vehicle telematic systems, transport insurer Zurich says.
Responding to a National Transport Commission proposal to improve the take-up of telematics by the trucking industry, Zurich’s risk engineering manager Mervyn Rea has suggested a rewards-based system.
Rea proposes amortised pricing be introduced to help the industry offset the financial burden of installing the tracking technology, which can cost thousands of dollars depending on the number of vehicles being fitted.
“Insurance companies are key stakeholders in the transportation industry, and have the opportunity to maximise the adoption rate on in-vehicle technology, by providing significant financial incentives to fleets,” Rea writes.
“…insurers can actively assist with the take-up of telematics system in the road freight sector by providing incentives and distributing setup costs over years, hence reducing the prohibitive costs within the first year.”
He goes on to say insurers can look at reduced premiums to promote the use of in-vehicle tracking systems.
Rea says companies should be encouraged to adopt GPS-style monitoring tools because the technology can prevent crashes by identifying dangerous behaviour such as excessive speed and acceleration and harsh braking and cornering.
According to Rea, telematics will attract companies if they are used for positive enhancements as opposed to compliance monitoring. He says there will be a negative reaction from the industry if the technology is mandated.
“Drivers need reassurance that the technology is not used to prosecute them for misdemeanours, but instead rewards them for improving their driving skills,” Rea says.
Rea writes that the technology can report back directly to the driver rather than just the manager and the regulator.
This, he writes, will give the driver the opportunity to improve their performance and seek help if required without the fear of fines or penalties being imposed.
Rea says telematics can monitor the temperature of freight to help insurers with any potential liability claims.
“Monitoring the location of cargo can also reduce the risk of cargo theft,” he says.
The NTC draft paper proposes a national strategy on telematics, supported by industry and government, to encourage the trucking industry to transition to in-vehicle tracking systems.
Despite some sectors of the supply chain embracing the technology, the NTC says the same has not happened in the trucking sector.
Telematics are currently used in applications such as the Intelligent Access Program (IAP), which grants operators enhanced route access in return for being monitored.
The IAP applies to higher mass limits in NSW and Queensland and to higher productivity vehicles in Victoria and South Australia.
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