Government mandate boosts Progressive’s new UBI program

Government mandate boosts Progressive’s new UBI program | Insurance Business

Government mandate boosts Progressive’s new UBI program

A government mandate in the commercial trucking arena is making it easier for insurance providers, like Progressive, to implement usage-based insurance (UBI) programs for their typically tech-wary clients.

“Progressive for years now has been looking at UBI. We did it on the personal lines side of the business for a long time,” said Dave Lubeck, business development consultant at the company.

“Come last December, it became a federal mandate that all truckers that used to have paper logs now needed to have the electronic logging devices [ELDs], and that really sparked our interest even more knowing that was coming. Now, instead of having to send devices out – having them plug in, having lag time – the devices are already there and the information was already there.”

As of December 2017, ELDs are being used to electronically record a truck driver’s Record of Duty Status (RODS), effectively replacing the paper logbook drivers relied on to record their compliance with Hours of Service (HOS) requirements before the mandate.

Smart Haul, the UBI program that Progressive developed for commercial truckers, is now available for owner operators and small fleets that have an electronic logging device in place, and offers qualifying truckers minimum savings of 3% on their initial commercial auto policy period once they sign up and start sharing their ELD driving data with Progressive.

“[The] opportunity to be able to bring that user-based information into the way we go through and write a policy was right in front of our eyes, and that was pretty unique and exciting that the federal government did a lot of the legwork for us,” said Lubeck. “We’re able to go through and offer some really nice savings to the trucker because of their driving habits. That was data we weren’t able to see before, and now we can reward really good drivers with really good rates.”

Commercial truckers haven’t always been open to implementing technology, but the ELD mandates have opened the door for insurance companies to help their trucking clients get in on the telematics frenzy.

“The biggest change that has actually transpired was two years ago, [when] the main concern of the trucker was big brother watching over [their] shoulder all the time,” said Lubeck, adding that now the ELDs are in place, their main concern is around correctly logging driving hours. Instead of filling out paperwork, electronic logging devices do the heavy lifting for them by tracking the number of miles they’ve driven.

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For Progressive, measuring driving behavior is a major benefit of the UBI program, especially since it can be difficult to motivate someone to improve how they drive without that ‘carrot’ or tangible reward.

“There’s now that motivation for a trucker to change his driving habits,” said Lubeck, since by avoiding tailgating, not speeding, and finding the best routes, “it makes a big difference in their insurance premiums.”

He’s optimistic that the long-term effect of the UBI program on the roads will be positive.

“Smart Haul could have a huge impact on the safety we see of vehicles on the road,” he said.