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Tackle these telematics misconceptions to sell more with middle market clients

DEC. 01, 2020

In addition to managing their business, many middle market business owners face added concerns related to the safety of their fleet drivers and vehicles on the road. Nationwide’s latest Agent Authority research1 found telematics present a prime opportunity for agents to help reduce clients’ concerns and optimize their fleet performance – all while driving agency sales.

The survey also uncovered some common misconceptions about telematics, however, that carriers and agents can address with middle market clients to more effectively counsel them on telematics and improve selling success.

Misconception: Telematics solutions are too expensive or difficult to implement

Though 6-in-10 agents are knowledgeable about telematics, some question the benefits businesses receive from telematics and 14% don’t believe their clients would pay at all for the technology. However, agents who aren’t considering telematics for their business auto clients may be missing a big opportunity as 90% of business owners agree the benefits of telematics outweigh the financial cost.

Further, business owners are willing to pay and may be open to paying more to track driving habits than most agents expect. Six-in-ten (61%) agents think clients would be willing to pay $29.99 or less per vehicle each month, while 52% of business owners say they’d actually pay $30 or more each month per vehicle.

More than 20% of business owners also cited the time it would take to install telematics devices as a potential barrier, though only 5% of agents feel this is a concern.

Advice for agents: Nationwide offers subsidies or discounts if customers opt to enroll in our telematics programs, helping agents ease financial concerns while delivering actionable insights to improve client safety and fleet efficiency. Most programs, including our Vantage 360 Fleet and Premium Partner offerings, also feature easy and quick-to-self-install devices.

Misconception: Businesses primarily consider telematics as a means to save money

While only one-third of business owners view cost savings as a benefit of telematics, many agents indicated they feel it’s the top reason clients adopt the technology, suggesting agents may not always recognize middle market clients’ motivations for using telematics.

In fact, business owners see telematics as an important operational tool as evidenced by their top perceived advantages, which include having the ability to track vehicle locations (48%), evaluating driver behavior (46%) and preemptively identifying maintenance needs with fleet vehicles (43%). Four-in-ten business owners also believe telematics provides a strong risk mitigation strategy for their company.

Advice for agents: Take the time to familiarize yourself with clients’ fleet operations and any challenges they face that could be improved with technology or other loss control efforts. The survey results show agents have an opportunity to change the conversation around telematics from being a nice ‘add-on’ perk, to what fleet management telematics has really become – an essential tool for operating a fleet-focused business.

Misconception: Clients will ask if they’re interested in telematics solutions

Although middle market clients shared a high rate of telematics adoption with their fleets, results also indicate business owners who don’t use telematics are primarily deterred by their lack of knowledge about the technology.

Agents likely have opportunities to broach telematics discussions more with clients because only 43% say they’re talking about benefits of telematics with customers. Four-in-ten producers and 7-in-10 customer service representatives also believe they need more resources to successfully guide clients with telematics.

Advice for agents: As you build telematics into sales processes, consider the resources and support provided to help your team, particularly producers and customer service representatives, effectively advise commercial auto clients about telematics or answer inbound questions. With growing telematics adoption among businesses, agents have a tremendous opportunity to provide needed recommendations and resources to business owners as they look for the right solution for their commercial fleet.

Misconception: Clients won’t use telematics because it’s an invasion of privacy

Many agents believe clients are hesitant to adopt telematics due to data privacy concerns, and they’re not completely off base – 37% of business owners say privacy concerns are a barrier for using telematics devices. Despite those concerns, business owners overwhelmingly prioritize the safety of their drivers – their third highest business concern – and 96% agree telematics can improve driver safety.

Only 43% of agents say they’re talking to clients about the data collected by telematics, and just over half of business owners have heard from agents on the subject, highlighting opportunities for agents to provide greater guidance on the kinds of data being measured and how it’s used. Carriers also play a critical role in providing the resources to prepare agents for these conversations.

Advice for agents: Nationwide’s telematics programs help make it very clear to customers and agents how data is being collected and used, and the benefits customers can gain. Learn how Vantage 360 Fleet measures driving factors here.

Sources / Disclaimers

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    These and other important insights came out of the 2020 summer survey of the Agent Authority research series conducted by Nationwide, which includes samples of independent insurance agents, small business and mid-market business owners, and consumers.