Survey: Middle market business owners want telematics solutions more than agents realize
COLUMBUS, Ohio, Dec. 3, 2020 /PRNewswire/ -- If commercial insurance agents aren't considering telematics solutions for their auto clients, they are missing a big opportunity to drive sales and help their customers optimize fleet performance. Telematics solutions present a prime growth area for commercial agents as most middle market business owners welcome the technology and champion its positive safety and operational impacts, according to Nationwide's new Agent Authority survey*.
The research revealed while 88% of middle market business owners with fleet vehicles trust their agent's telematics counsel, some agents feel they can broaden their telematics knowledge and sales resources to more effectively advise clients.
"In addition to managing their business, many middle market business owners face the added concerns related to the safety of their drivers and fleet vehicles," said Pete Frey, director of Commercial Lines Telematics at Nationwide. "The results highlight a tremendous opportunity for carriers and agents to change the conversation around telematics from being a nice 'add-on' perk, to what it really has become - an essential tool for operating a fleet-focused business."
Nationwide's telematics survey identified four key themes for commercial agents and middle market business owners with fleet vehicles:
1. Agents underestimate business owners' knowledge and interest in
telematics
2. Middle market business owners are ready and willing to invest in
telematics
3. Safety and operational benefits are top of mind for middle market fleet
owners
4. Carriers/Agencies can better support agents in addressing client concerns
Agents underestimate business owners' knowledge and interest in telematics
Fleet owners may be more supportive of solutions than agents realize and are willing to pay more to track unsafe driving behaviors than agents anticipate. Additionally, some agents may be misjudging business owners' primary motivations for using telematics.
-- 64% of agents believe they're knowledgeable about vehicle telematics
devices or telematic smartphone apps.
-- 14% of agents said they don't think clients would pay at all for
telematics, yet 93% of businesses say they'd pay to ensure a safer
driving experience.
-- 70% of business owners would be willing to pay between $20-$39.99 per
month per vehicle, while more than 60% of agents said they think clients
would pay $29.99 or less a month.
-- Agents believe distracted driving is the top cause of accidents, but
business owners see it differently, citing driving under the influence,
driver error, road conditions and weather as leading causes of accidents
for their fleet vehicles.
Responses also show some agents would benefit from additional resources to help them talk to commercial lines customers about the advantages of telematics, especially at the producer and customer service representative levels.
-- Among the owners that haven't adopted telematics, their biggest
deterrent is a lack of knowledge.
-- Nearly 4-in-10 producers and 7-in-10 customer service representatives
don't feel they have the resources needed to effectively counsel clients
on telematics.
Quick tip for agents:
-- "It's a good time for agencies to revisit the types of resources and
support they provide to team members, especially producers and customer
service representatives, to help them effectively discuss the advantages
of telematics with clients and how it's integrated with insurance," Frey
advises. "Also, consider a carrier's role in the sales or account review
processes. In some cases, connecting a client directly with loss control
or product experts can offer additional technical expertise to help
guide the customer and allow you to focus on other ways to serve them."
Middle market business owners are ready and willing to invest in telematics
Business owners estimate their fleets experience 7.5 accidents per year, so it's not surprising their top concerns include distracted driving among employees, accidents with vehicles and the safety of drivers, and knowing the location of their business' vehicles. Business owners also indicate they've done their research and are willing to invest to improve safety, with 86% aware of telematics solutions, a high rate utilizing them, and nearly 90% agreeing the benefits outweigh the financial cost.
-- Top concerns for middle market business owners with fleets include:
distracted driving among employees (83%); rising cost of insurance for
fleet vehicles (82%); safety of employees driving fleet vehicles (81%);
driving accidents with fleet vehicles (81%); knowing the location of
their business's fleet vehicles (76%).
-- 94% of business owners say telematics helps protect their employees on
the road.
-- 91% say telematics has a positive impact on operations.
-- Business owners believe leading causes of accidents to be: driver error
(18%); driving under the influence (18%); road conditions (18%);
weather-related causes (17%); distracted driving (15%); and vehicle
failure (15%).
Quick tip for agents:
-- A variety of telematics and dash cam solutions exist to help your
clients prioritize safety. Learn about the different types of telematics
offerings your carrier partners offer and how they can benefit
commercial fleets.
Safety and operational benefits are top of mind for middle market fleet owners
Fleet owners are safety-focused with 83% offering formal driver safety training at least semi-annually and 90% employing a formal, documented accident investigation process. The operational benefits business owners see from telematics also drive adoption as they place high value on the ability to track vehicle location, evaluate driving behaviors of employees and preemptively identify maintenance needs.
-- 45% of business owners believe telematics prevents accidents and
insurance claims from happening in the first place.
-- Business owners' top perceived advantages of telematics include: having
the ability to track locations of vehicles (48%); evaluating driving
behaviors of employees (46%); preemptively identifying problematic
vehicle conditions to help avoid costly repairs (43%); and providing a
strong risk mitigation strategy for their business (40%).
Quick tip for agents:
-- Lean on carrier partners to offer innovative telematics solutions to
help drive safety and efficiency in clients' operations. Many carriers
also offer loss control and risk management resources and services,
which can have a significant impact with helping improve fleet and
driver safety.
Carriers/Agencies can better support agents in addressing client concerns
The survey also highlights a few misconceptions business owners hold about telematics and the difficulties with installing the technology, emphasizing opportunities for agents and carriers to better educate clients on solutions available, how they work, and how they collect and use data.
-- Business owners and agents think the telematics data being collected is
a privacy concern.
-- 79% of agents feel their clients are hesitant in considering
telematics because they think it's an invasion of privacy; many
business owners agree as 37% say privacy of the data collected is a
barrier for using telematics.
-- 83% of business owners believe the data captured through telematics
could make their insurance rates go up.
-- Business owners may overestimate difficulties of implementing telematics
technology.
-- Business owners list the cost of investing in telematics (35%) and
the time it would take to install the devices (21%) as top barriers
for using telematics.
Quick tip for agents:
-- "Today's telematics programs help make it very clear to customers and
agents how data is being collected and used, and the benefits customers
can gain," said Frey. "Some carriers, like Nationwide, also offer
subsidies or discounts if customers opt to enroll in their programs as
well as easy and quick-to-self-install technology. With growing
telematics adoption among business owners, agents have a tremendous
opportunity to provide needed recommendations and resources to business
owners as they look for the right solution for their operation."
*These insights and more were uncovered through Nationwide's ongoing Agent Authority research series, which includes samples of independent insurance agents, various business owners, and consumers. Previous Agent Authority research reports: Agent-customer relationship; Small business owner needs and challenges; Middle market business owner needs and challenges; Agents' top concerns through the pandemic; Consumer and business owner cyber preparedness.
Survey Methodology:
Nationwide commissioned Edelman Intelligence to conduct a 20-minute quantitative online survey among a sample of 1,600 U.S. independent insurance agents, mid-market business owners with fleet vehicles and general consumers between June 9 - June 25 to understand what business owners and consumers value when buying or renewing insurance policies, explore the different challenges each audience faces around insurance, gauge perceptions of the economy and how each audience is managing uncertainty, and find out the actions business owners and consumer have taken as a result of COVID-19 and the conversations they're having with agents. As a member of CASRO in good standing, Edelman Intelligence conducts all research in accordance with Market Research Standards and Guidelines.
About Nationwide
Nationwide, a Fortune 100 company based in Columbus, Ohio, is one of the largest and strongest diversified insurance and financial services organizations in the U.S. and is rated A+ by both A.M. Best and Standard & Poor's. The company provides a full range of insurance and financial services, including auto, commercial, homeowners, farm and life insurance; public and private sector retirement plans, annuities and mutual funds; banking and mortgages; excess & surplus, specialty and surety; pet, motorcycle and boat insurance. For more information, visit www.nationwide.com.
Contact:
Graham Shippy
(614) 249-6349
Shippg1@nationwide.com
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SOURCE Nationwide
