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Amerisure Proves There’s a Route to Safer Fleets

The Challenge

Insurance is supposed to be a win-win proposition: Customers win by getting piece of mind that they’re protected from unforeseen circumstances that could otherwise be a financial distaster. Insurance providers win by collecting more in premiums than their customers actually cost them.

But Amerisure Mutual Insurance Company had customers that flipped that comfortable script. They cost Amerisure more than they paid in premiums. Some of the fleet customers were at risk of being dropped from their coverage. Given their history, they’d have a difficult time finding a carrier willing to ensure them.

These companies operated 26 fleets of vehicles totaling more than 1,800 vehicles. Collectively, they cost Amerisure 117% of the revenues generated through their premium – which is called Loss & ALAE % (allocated loss adjustment expense) .

That’s when Amerisure launched a two-year project to turn their losing proposition back into a win-win situation. The selected customers would install and use GPS Insight’s Fleet Tracking and a Customized Safety Program designed to address their safety challenges.

Establishing Benchmarks for Improvement

As a first step, Amerisure selected 3 underwriting data points they keep for all customers that would be tracked across the entire two-year program for each participating fleet. These were the benchmarks that would help them determine the effectiveness of technology and if it could help their customers improve safety.

fleet management challenges

Armed with their data, Amerisure implemented GPS Insight’s Safety Program and launched their initiative to reduce their losses.

Along the way, they were hopeful this program would also help:

  • Cut costs for customers
  • Reduce the likelihood of dropping coverage
  • Make the roads safer

Amerisure’s Approach to Improvement

To ensure an appropriate data study, Amerisure established two additional control groups that would be tracked over the two-year project. One of these groups had already deployed GPS tracking solutions of their own and were allowed to continue using that solution. The last group would be added to the program and continue operating without the use of fleet tracking technology.

Over a two-year period, actuaries analyzed quarterly reports that provided the total number of unsafe events and the unsafe event per 100 miles driven for every vehicle. This data was collected quarterly throughout the duration of the program.

This allowed Amerisure to determine if a reduction in the number of unsafe events per 100 miles driven would lead to improvements in these key loss KPIs.

 

  • MVA (Motor Vehicle Accident) Claims Count
  • Claims/$100,000 in Premium
  • Loss & ALAE % (Allocated Loss Adjustment Expense)

Results Show Dramatic Reduction in MVAs and ALAE 

30% Reduction
After two years of data analysis , Amerisure determined that only the group that saw consistent positive improvements in their across all data points were the customers using GPS Insight’s safety program. These Amerisure customers saw a 1.74 reduction in the average number of claims per year, they reduced their claims per $100,000 in premium from 19.9 to 5.2 (a 74% improvement) in just under 2 years.
Most importantly, Amerisure saw the loss ratio decrease from 117% to 30.1% by the end of year 2.
Amerisure Study Data
What does an 85% ALAE reduction mean? For Amerisure, it wasn’t just a win: It was overwhelming evidence that the right telematics safety program could dramatically reduce overall fleet exposures and the associated costs.

Expanding the Program and Emerging Technology 

Amerisure has expanded its Fleet Safety Program and now has more than 50 customers utilizing GPS Insight safety solutions. GPS Insight is the recommended partner for all Amerisure customers with high MVAs and ALAE %. With the addition of Driveri to the Amerisure Fleet Alliance Program, customers are generating long-term insights based on Driveri’s ability to: automatically analyze every minute of drive time; and score drivers on both safe and hazardous driving actions.


“Partnerships are successful because of an alignment of mutual interests. At Amerisure Insurance, our mission is to deliver value-added products with superior service. GPS Insight as our telematics partner, has been instrumental in partnering with us in delivering great products and superior service to our policyholders.” 

 Kevin Clary – VP of Risk Management – Amerisure Insurance 

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