“We’re good at predicting when a vehicle needs a service,” says Chris Chandler, associate director at Lex Autolease. “We touch the vehicle fairly regularly and we get the odometer reading then.

“Telematics would give accurate information, but if the cost is too high the benefit is outweighed.”

Lex Autolease also doesn’t believe there is much demand from its customers.

Chandler points out that not all companies employ fleet specialists and interest from finance, HR or procurement departments can be minimal.

Although he can see insurance-based telematics becoming more popular, currently, there is not much appetite.

“We’re not getting customers coming to us saying ‘we need telematics for insurance reasons’,” he says. 

Chandler acknowledges that companies want to record business and private mileage but “they won’t want to pay thousands of pounds for it” and the “big brother argument is still a challenge” for drivers that have private use of the company car.

“People do get used to change,” he adds. “When CCTV was first introduced, people thought it was disgraceful and now we’re one of the most watched nations in the world.

“Telematics does have a future and will become more popular but it won’t change overnight. I don’t think we’ll see track and trace-style telematics standard in every car in a handful of years.”

Telematics will link cars to dealerships

Rhys Harries, ProFleet2 development consultant at ALD, believes that the next generation of telematics will see vehicles linked directly to dealerships, parts pre-ordered and downtime minimised. There will also be over-the-air updates to the car.

However, the challenge from having a factory-fit telematics solution is “if you have a mix of makes and models then you’ll have a mix of telematics solutions”.

Harries suggests legislation or a code of practice could solve this. But, he adds: “I wouldn’t expect telematics to be standard for more than five years, perhaps 10.

“In the meantime we’ll see more companies and manufacturers dipping their toes in the water.”

 

The insurance company view

Insurance companies are conducting talks to introduce standardisation for telematics.

At the moment, each uses specific packages and if a fleet changes its insurer it is not always possible for that technology – or black box – to be transferred.

Standardisation could revolutionise the way that insurance companies work with fleets to cut costs by facilitating accurate risk assessments.

The outcome of these talks could also ultimately dictate whether insurance companies want telematics to be installed as standard within company cars over the next decade.

Andy Price, practice leader – Europe motor fleet, Zurich Insurance, said his company is having “high level conversations” with other insurance companies on this topic.

Price believes that the next decade will see increased uptake of telematics. Driver telemetry systems in fleets will probably continue to be voluntary, but with certain high-risk fleets the use of these systems may become mandatory.

“As people become used to having telematics in their private vehicles, there will also be greater acceptance of its use in fleet vehicles,” he says.

“Younger generations are used to having their lives voluntarily tracked through social media so there’s unlikely to be any issue.

“From the perspective of the insurance companies, the more data you can get, the more accurate you can be in ascertaining collision history and, consequently, risk assessments.

“However, there will still be a need for businesses to proactively manage the data generated rather than relying on employees to self-improve.

“But at this point in time there needs to be some standardisation across the industry.

“If a company changes its insurance provider then it doesn’t want to have to change the black box in its vehicles.”

Data used to underwrite risk

Matthew Crane, managing director of the motor division of specialist fleet insurance company QBE, agrees with this sentiment.

He says: “Telematics is now being brought to the fore of the insurance sector so that it can be used to underwrite risk.

“It makes sense for the insurance companies to harness that data in order to manage risk, but the sticking point at the moment is that the telematics manufacturers all use different languages within their products.

“There needs to be standardisation, or possibly consolidation within the market, which will assist fleets and insurance companies.”