Commercial auto insurance at Nationwide is about to get connected

New telematics director shares his vision for a UBI program and the potential of connected car technology

Commercial auto insurance at Nationwide is about to get connected

Motor & Fleet

By Alicja Grzadkowska

Despite obstacles to profitability, like thin margins, the commercial auto world is paying attention to developments in telematics. And while much of the talk has been about how data and devices can help people work on their risky driving behaviors and access better auto insurance pricing for their personal vehicles, commercial auto is going through its own evolution.

That’s why Nationwide recently hired a commercial telematics director who’s worked in insurance for over 20 years, and spent a lot of that time focusing on connected car technology. Building a product for the commercial auto industry will mean looking back at lessons learned from telematics in the personal auto space.

“On the commercial insurance side, you’re bringing together the advantages and the learning that the personal insurance side have gathered over the last few years and then taking the experience of the fleet telematics side and bringing it together for a double-edged proposition for business owners,” said Pete Frey (pictured), Nationwide’s new hire who will develop and oversee a usage-based insurance (UBI) program and connected business fleet platform for the insurer.

“We want to build a platform that’s going to benefit our commercial policyholders, not just from a savings standpoint,” he explained. “That is a big part of it, but in addition to the insurance savings, we want to also provide different types of services that are enabled by telematics – things that help them with their productivity, with driving safety, with efficiency – all using the foundation of telematics.”

Commercial is unique because the focus is on the business owners and what they’re trying to accomplish. Some of Nationwide’s primary target customers and members are small business owners, and the success of their work relies on vehicles getting to their destinations, and not sitting on the side of the road or in a repair shop.

“They might have anywhere from five to 15 vehicles as part of the business, and this is their life blood so things like efficiency and productivity are very, very important to them,” said Frey. “In order for us to be able to succeed in helping them, we have to look at it through their eyes. If one of their vehicles breaks down, that could be a whole day of revenue loss for them if they’re not able to make deliveries or serve some of their customers.”

Telematics has been around for a while in the commercial fleet space – longer than on the personal side – and it was mainly used for GPS tracking of vehicles and asset management, said Frey. In 2010, when insurance got a hold of it and realized the benefits telematics offers from the personal auto insurance side, UBI was born and now it’s coming back to commercial auto again.

The future of the growing commercial telematics field will be all about the data, according to the new director. Driving, location, and contextual data, which includes weather and road conditions, are all examples of information Nationwide will be able to access that’ll bring more opportunities to the insurer and its business owners to help manage their risk, see where their drivers are, and figure out the optimal routes for them to take.

“From an insurance side, it gives us more data variables to help measure that risk and offer better pricing, and potentially better discounts to our members. From the data side, it’s just phenomenal, the different opportunities that are coming with that,” said Frey.

“On the technology side, I see it going way beyond just the vehicle. I think you’re going to get into connected businesses. I think wearables, telematics-type transactions are happening from different devices. You’re seeing it as an example today with homes, where things like Amazon’s Alexa can tell you where your vehicle is if you have a UBI program or a personal telematics device. I think we’re just scratching the surface on how everything can start connecting.”


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