The Car and Truck Fleet and Leasing Management Magazine

Technology Advances New Risk Model

April 2007, by George Kilroy

From the time the industry was founded in the 1940s, fleet managers and fleet management companies have constantly looked for ways to improve the efficiency of business fleets. Fleet management has been transformed over the years by great new products, services, process improvements, information management, and technology advances.

A few years ago, I spoke with Mike Antich of Automotive Fleet about PHH Arval’s vision of using technology to advance new efficiencies. (See AF November 2003) Some things I mentioned then, benefit the fleet industry today: collecting vehicle information, such as mileage, in real-time through telematics technology; automating information collection from a company’s enterprise resource planning (ERP) and HR systems; and automating routine fleet decisions based on pre-established fleet policies.

Risk & Safety Next Breakthrough
I believe the next big breakthrough is in fleet risk and safety. Companies have struggled for years to find ways to increase driver safety and decrease negligent entrustment risk — costly not only in dollars, but also to corporate image. While progress has been made in gathering driver information through motor vehicle records, most organizations still use the traditional model of reacting to accidents after they happen and trying to manage down the costs.

Once again, technology is coming to the rescue, allowing fleets to pioneer a new risk model — predicting and preventing accidents. If a company’s goal is to proactively avoid collisions, reduce the number and severity of accidents, and aggressively reduce accident costs, technology enables a total solution that’s truly revolutionary.

The traditional model incorporates MVRs and driver profiles with accident management services such as First Notice of Loss, vehicle repair, and subrogation recovery.

Technology Captures Data
To these traditional elements, the new model adds innovative technology that captures and integrates new sources of information — information that’s key to driving down risks. For instance, at PHH, we’re excited about the kind of information and results we’re getting from our telematics service, PHH Onboard. The in-vehicle device provides real-time data about actual driver behavior, allowing fleets to take action to enforce safety policies; it also generates engine data, signaling potential problems with the vehicle that could cause unsafe driving conditions.

In addition, PHH is creating predictive models that will enable fleet and risk managers to identify fleet drivers most at risk of incurring accidents. Our pilot program is getting surprisingly accurate results in pinpointing at-risk drivers. We see this technology as a fantastic tool and plan to bring it to market later this year.

Using predictive techniques and analytics, it’s possible to target the most atrisk drivers and give them specific training to reduce their on-road risk. Add the element of telematics technology, and you have real-life information to reveal whether driver training is effective. Combined with the more traditional MVRs and accident management capabilities, it’s a holistic approach that will transform collision management from a reactive reflex to a proactive science.

Ten years from now, as we look back, we’ll see technology has once again been the catalyst for tremendous improvements in fleet management in ways we never thought possible.

About the Author:

George Kilroy is president & CEO, PHH Arval, a fleet leasing and management company headquartered in Sparks, Md.

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