Improving commercial fleets safety in China

As of 2021, the number of trucks in China totalled around 33 million. The market is growing steadily and the outlook is positive, given China's strong economic momentum. On the other hand, motor insurance premiums in general are under growth pressure due to factors such as new car sales downturn and auto insurance market reform, while the market for truck fleet insurance, both commercial and non-commercial, has been less impacted and proves to be a promising opportunity.

The truck insurance business forms a major part of the commercial vehicle segment. In terms of profitability, insurance companies face great challenges in the truck segment, such as high volatility, claim severity as well as loss ratio. To better conquer these, Chinese insurance companies started to install ADAS (Advanced Driver Assistance Systems), DMS (Driver Monitoring Systems) and AEB (Automatic Emergency Braking) equipment on vehicles and bring in safety service providers to manage drivers. Choosing reliable providers and equipment is not easy, due to various reasons including but not limited to the inherent quick evolution of technology. For this reason, many insurance companies are yet to set out a business case for the successful adoption of this technology and the resulting loss ratio improvement.

The heavy-duty market (trucks with load capacity higher than 14 tons) has the greatest potential for ADAS application given its multiple pain points, including high traffic accidents and dangerous driving habits such as fatigue and overloading.

Through pilots, ADAS and other technologies used on commercial vehicles for loss control purpose have shown to be able to improve some key performance indices. In fact, we have found that after installing ADAS, the warning ratio of certain ADAS functions (especially Forward Collision Warning, Headway Monitoring Warning and Lane Departure Warning) decreased by around 15%.

To help drivers enhance their safe driving and insurance companies improve their key performance indicators, Swiss Re has established cooperation with partners in China to develop several integrated services offered via the Swiss Re Mobility Platform. This is a telematics data analysis platform enabling insurance companies to better evaluate and service fleet clients in China.

"Truck fleet insurance is a relevant, but complex share of the motor market in China. Our solution empowers insurers to deal with safer fleets, unlocking higher profitability of their motor portfolios in China"

Leo Li, Lead Auto and Mobility Solutions, China

To help insurers improve their truck business loss ratio, the Swiss Re Mobility Platform enables sound collaboration with an extensive number of insurance companies and safety service providers. Through its Mobility Platform, Swiss Re gathers telematics data, insurance policies, and claims data. By analysing this data, our solution evaluates the service quality of service providers (online rate, installation efficiency, etc), tracks the loss ratio change, and explores valuable patterns, thus empowers insurance companies to choose effective and reliable service providers and improve loss ratios.

With data of scale and quality, Swiss Re's solution can analyse the correlation between driving behaviour and accidents, identify the risk of each vehicle and predict the possibility of an accident through our proven vehicle risk analytics. The knowledge gained from our solution will help insurance companies refine their renewal strategy and, at the same time, help safety service providers manage trucks as required. The insurance companies will benefit from the improved loss ratio, while safety service providers will receive appropriate training and support.

In addition to vehicle risk analytics and partner evaluation functions, the Swiss Re Mobility Platform will provide services such as bill management, portfolio management, a telematics data dashboard, claims report, accident inquiries and underwriting recommendations.

The Automotive and Mobility Solutions team has recently taken this value proposition one step further  by developing a methodology that can attribute a risk score to each truck within a specific fleet: the Swiss Re Truck Risk Score.

The score and in-depth understanding of the risk presented by each vehicle will allow insurers to analyse their portfolios in more detail, enabling further optimisation. Most of the risk scores on the Chinese market are based on GPS data. The Swiss Re Truck Risk Score involves ADAS and DMS warnings, which gives the score higher predictive power and accuracy.

"The Swiss Re Truck Risk Score is based on telematics and static information from a cumulative driving mileage of 1.1 billion km. Thanks to this data and our sophisticated analytical models, the score empowers insurers to better understand the likelihood of a claim being filed for each truck in their fleet, with the ultimate goal of safer commercial transport."

Paolo Sgrignoli, Senior Scoring and Analytics Expert OEM, Swiss Re