The cost of insurance is unlikely to be something that puts a smile on your face.
But reducing its cost is important to all businesses.
Telematics is now able to support people to start taking the first steps towards self-insuring.
It involves using telematics as a viable option and more and more businesses are going down the self-insuring route, specifically for non-powered assets such as generators, containers, trailers and other types of plant equipment.
Non-powered assets are a focus for self-insuring because they are the assets usually insured only against theft.
Thanks to telematics, instead of paying insurance premiums to protect against the replacement cost of stolen assets, businesses can instead improve their chances of recovery and avoid the cost of theft.
Matthew Perkins, from Australasian telematics provider Smartrak, says the risk of non-powered asset theft is very real and statistics back that up.
“Rates of theft are on the rise. Between 2004 and 2014, plant and equipment thefts in Australia increased by 45% and in New Zealand 20% of all vehicle thefts are trailers.
“Sadly, most plant and equipment that is stolen is never recovered. The recovery rate can be as low as 10%.”
There are a number of reasons for those thefts. A lot of equipment rarely has distinguishing marks that can identify it, unlike trucks, vans, or cars which have number plates and VIN numbers.
And plant and equipment are not always protected by high levels of security. They are also easy to steal and use in many cases. For example, it is often easy to get duplicate keys.
If a non-powered asset is stolen and it is insured, there is a long process to follow.
That includes reporting the theft to the police, claiming from the insurance company and the insurance company processing the claim, assessing it and finally reimbursing the business according to its policy.
Perkins says telematics makes the process much “simpler, quicker, and less costly”.
“When an asset is stolen you log into your account to get a real-time location for the asset. You go to that location, potentially with the police, to recover what’s yours,” he says.
Telematics makes it possible because GPS tracking devices ping their location at regular and frequent intervals.
GPS hardware is evolving quickly and hardware – such as the TrakWise Remora – dedicated to tracking non-powered assets are designed to be used with assets that might not have their own source of power. Instead, it powers itself for months using its own internal batteries.
The TrakWise Remora also features an anti-tamper sensor to ensure businesses are aware of unauthorised removal of the hardware. Alerts and location are plotted back to Smartrak’s EyeQ System to help manage location tracking and escalation.
“Most businesses use the insurance route because it’s what they’ve always done – protecting the assets in their business that have a value by insuring them,” Perkins says.
“However, just because it is the way you have always done it doesn’t mean it is the most effective or efficient way.”
He points to the benefits of self-insuring using telematics which include saving money, reducing lost productivity and using fewer resources.
“Telematics solutions are often much cheaper than the expensive insurance premiums you must pay to get theft coverage on your non-powered assets, especially if you already have telematics integrated in your fleet.
“In addition, high-value assets are more expensive to insure than assets that have a lower value.
“With telematics, however, the cost is fixed regardless of the value of the asset. This can make it considerably cheaper to insure high-value equipment.
“With a telematics solution, you will experience considerably less downtime in the event of theft. In fact, it is possible to identify the location of the asset within minutes of discovering the theft. Therefore, the only downtime is the time it takes you to make the recovery.”
“Unfortunately, telematics cannot replace all the insurance premiums you must pay each year. Using telematics to self-insure your non-powered assets is, however, something you should consider.”
