PHLY reduces risky business with commercial auto telematics

May 11, 2020

Digital Insurance

Nathan Golia Editor-in-Chief, Digital Insurance

Commercial insurer Philadelphia Insurance Companies, better known as PHLY, has made big steps in using telematics technology to reduce risky driving habits among its commercial auto fleet customers. But, says Andy Shockey, associate vice president at PHLY, the road to success was rocky.

Up until 2016, “it was about 10 years of lessons learned,” Shockey says. “Prior to that, we had been working with some equipment and software suppliers trying to get it going, and learned about working with a GPS supplier in the most effective and fair way to them and us.”

Commercial fleet accounts are crucial to the company, Shockey continues, with an ecosystem including insurer, broker, policyholder and employee. In 2016, PHLY discovered Azuga, a San Jose, Calif.-based insurtech providing GPS technology and software to evaluate driving habits for insurers and fleets.

“All GPS providers provide the same kinds of data and features, but what it came down to was when we had some significant development points, they came to our office and sit down,” Shockey said. “We taught them about the insurance business and they listened to our perspective, weekly.”

Azuga couples a plug-in, OBD-II device with a software suite that helps fleet managers and PHLY discover the true nature of driving for customers ranging from social service providers to propane delivery. Part of the negotiation process was finding a price so that PHLY could offer the coverage to their customers without those fleets incurring additional costs.

“We picked some customers that had adverse auto experience in terms of claims and said we had this idea to help them,” Shockey says.

Today, about 15% of vehicles insured by the company are under PHLYTRAC, with participating fleets participating seeing hard braking reduced by 98%, hard acceleration by 97%, speeding events by 69%, and speeding over 15 mph events reduced by 89%. Some users are even purchasing, outside the PHLY/Azuga relationship, additional technology like dash cams to get even more refined data about fleet drivers.

Though PHLY understands that there’s a “big brother” component to telematics, the company has strived to be clear about its use of data.

“We’re not trying to find a problem here,” Shockey says. “Sometimes the data proves the driver was doing the right thing in case an accident. This is the data that we use to push back against gross negligence claims.”

And with some fleets sidelined partially during the coronavirus epidemic, Shockey says that PHLYTRAC is continuing to pay off.

“If it’s a parked fleet a question like ‘why is this vehicle starting up’ is something customers can get answers to quickly,” he says. “We certainly see this as part of our go-forward vision.”