Technology is no doubt playing an ever-increasing role in all our lives. This is perhaps not seen as evidently as in the automotive industry, where huge advancements to both safety and fleet management are helping businesses in their everyday operations.

Cars now have more technology as standard, and a host of route-planning and fleet-optimising programs are making a company’s on-road assets a valuable commodity.

However, with a greater reliance on tech there comes a greater risk. Hacking of the interconnected fleet network is one example, and one which could result in large and costly disruptions; another is the sheer cost of repairing damaged vehicles should they get into an accident.

Global Insurance company Zurich recently looked into the effect this is likely to have in the next couple of years, leaving some managers with interesting decisions to make in terms of their business insurance.

Smart vehicle insurance

“Even a mid-priced automobile today is remarkably ‘smart’. Some modern automobiles have as many as 50 electrical control units,” Zurich began in its report.

“[However], privacy concerns will continue to be a thorny issue for all organisations that compile, analyse, share or sell the enormous amount of information now available digitally, including information produced by and about automobiles and their drivers.”

Such benefits to a fleet using such technologies include:

  • Closer monitoring of traffic, helping route optimisation
  • Identification of poor or dangerous driver behaviour
  • Discouraging the use of fleet vehicles for private reasons – when insurance may become invalidated
  • Aiding the recovery of stolen vehicles
  • The sharing of data with insurance providers to create a refined insurance policy

Risk management

However, using these technologies also throws up some conundrums, which those operating the vehicles need to become aware of, particularly regarding:

  • What information companies and operators have are allowed to collect
  • For how long such information can be kept
  • Whether there are management liabilities if vehicles are not monitored

Such issues are likely to be ironed out as such innovations become more widespread – which may not be too far down the road. According to the report, more than 60 per cent of new cars will have connected capabilities by 2017.

With Zurich opening the dialogue, could this be something many business leaders begin to consider more seriously?