Can vehicle telematics help your business?

Promising up to a 40% reduction in accident rates and fuel consumption by up to 15%, telematics can bring numerous benefits to many businesses.1

What is telematics?

The most common form of telematics is a black box fitted to a vehicle via the CAN bus (engine management system). It records and delivers key information as to how the vehicle has been driven, such as:

  • speed,
  • location,
  • distance travelled, and
  • types of roads used.

Combining telecommunications and informatics for use in vehicles, a telematics system can give control and knowledge of how your business is being represented whilst on the move.

What are the benefits?

As well as capturing data that will identify drivers who are at risk of a collision and need training, telematics also track vehicle movement, assisting with routing, scheduling, and incident management.

Modern day telematics also offer a host of business specific optional extras, such as in-vehicle driver feedback, PDA devices, and phone apps for mobile monitoring.

Is it effective?

There is little doubt that when the purchaser fully engages with fleet telematics, it can have a positive impact. By displaying wall charts, giving feedback to drivers, setting strict driving standards, and giving positive encouragement for improvement, then a reduction in incidents is possible.

Compelling telematics statistics

An RAC survey into telematics suggest the positive impacts from telematics include:

  • reduction in fuel use (55%),
  • reduction in speeding incidents/fines (49%),
  • reduction in collisions (43%),
  • reduction in overtime claimed (39%)
  • and reduction in maintenance costs (31%).2

Whilst plenty of anecdotal evidence exists in support of telematics, the exact benefits vary considerably depending on the circumstances of the business. This means that selecting the right system and using it to its full potential, is of utmost importance.

Got telematics, but not using it?

Without direct knowledge of dangerous driving or speeding, an employer is not in a position to prevent it and keep their fleet safe. With a fleet telematics system installed, you will receive information about dangerous occurrences as well as persistent and excessive speeding, which increases your ability to act.

It is important that you are able to demonstrate an effective system of monitoring the data and taking action against drivers who are regular offenders.

Impact on driver behaviour

When drivers are aware of telematics being fitted to their vehicle, they are more likely to expect challenges for reckless driving events, and may demonstrate more awareness of their driving behaviour. If these challenges do not occur, however, the driver could be forgiven for thinking that their driving style is not monitored and revert to bad habits, reducing the benefits of the system.

Telematics can represent an excellent tool in controlling risk and monitoring vehicles, however, it is vital to the success of the project that research, implementation and enforcement of the system is sufficiently resourced to obtain maximum benefit.  



1 Lightfoot rewarding better drivers https://www.lightfoot.co.uk/

2 RAC surveyed 1,000 UK business between September 15 and April 16 to track and monitor attitudes to telematics use. The results reflect the responses of those who took part in the research. https://www.rac.co.uk/media/1425/rac-telematics-report.pdf

The information contained herein is based on sources we believe reliable and should be understood to be general insurance and risk management information only. The information is not intended to be taken as advice and cannot be relied upon as such.

Statements concerning legal, tax or accounting matters should be understood to be general observations based solely on our experience as insurance brokers and risk consultants and should not be relied upon as legal, tax or accounting advice, which we are not authorised to provide.

This is a marketing communication MC200822772.

Learn about managing risk with our eBook

As experts in insurance, we take a look at the issues affecting the tyre industry today. Find out how you can reduce the risks to your business and employees

Read our latest articles