Commercial auto insurers are placing greater emphasis on how fleet operators use telematics, cameras and other safety technologies to improve driver behavior and reduce losses, rather than on simply whether the systems are installed.

The shift comes as commercial auto remains an unprofitable line for many insurers, prompting greater underwriting scrutiny and increased reliance on operational data to inform risk selection and pricing, brokers and insurers say (see related story below).

Telematics and other vehicle technologies give insurers greater insight into driver behavior, routes, travel times and hard-braking events that may contribute to losses, said Mark Gallagher, West Des Moines, Iowa-based vice president, national transportation at Risk Placement Services, the wholesale division of Arthur J. Gallagher & Co.

Rather than relying solely on historical loss experience, insurers are increasingly using the information to better understand future risks, he said.

Technology has increasingly become a prerequisite for obtaining commercial auto coverage, particularly in trucking and other heavy vehicle classes, said Nicole McMurtry, Chicago-based president, Illinois transportation practice and national transportation vertical leader at USI Insurance Services.

New market entrants often require telematics, electronic logging devices, cameras or a combination of the technologies “as a cost of doing business with the program,” she said.

While some insurers offer discounts for sharing telematics data, securing those credits can be difficult, Ms. McMurtry said.

For many insurers, the technology is now a baseline underwriting requirement rather than a differentiator. “It’s not just a ‘hey, here’s your discount’ anymore. It’s ‘if you don’t have telematics, you don’t get access to our program,’” she said.

Telematics have become “table stakes” for insurability for large commercial fleets, said Rick Burgraff, New York-based head of excess casualty, East zone, at Axa XL, a division of Axa SA.

Underwriters want to understand how fleet operators monitor telematics data, coach drivers and respond to unsafe driving behaviors, rather than simply whether the technology is installed. “If they don’t have the technology, there’s very little underwriter receptivity to insuring the risk,” he said.

While telematics can improve pricing for guaranteed-cost and middle-market accounts, the technology may have less direct effect on pricing for large fleets with substantial deductibles because those companies retain much of the risk themselves, Mr. Burgraff said.

Technology is being used to inform underwriting decisions rather than simply helping fleets earn premium discounts, said Dan Abrahamsen, New York-based CEO of Cover Whale, a managing general agent.

Insurers may impose stricter underwriting standards or decline to write fleets that are unwilling to share data, he said.

Many fleets use telematics data to coach drivers, conduct safety meetings and identify areas for improvement, while insurers often provide risk-control services to help analyze the information and address higher-risk driving patterns, Mr. Gallagher said. “That coaching is invaluable,” he said.

Some insurers offer discounts or subsidies to fleets that share telematics data. In some cases, sharing electronic logging device data can result in premium discounts of 5% to 15%, he said.

But simply installing telematics or camera systems is no longer enough to lower insurance costs, said Paul Haywood, Orlando, Florida-based national risk control leader at USI.

Fleet operators also need to demonstrate they are using the data to change driver behavior and address risky driving patterns, he said. “Telematics doesn’t solve everything. It’s doing what you need to with that data to protect yourself,” Mr. Haywood said.

Companies that fail to act on telematics data may create additional liability exposures, he said. Some fleets are “really just collecting data that’s going to help the plaintiff attorney when the loss occurs” if they do not address issues the technology identified, he said.

Telematics that are installed but not actively managed can create significant litigation exposure, because plaintiffs’ attorneys may argue that companies failed to address unsafe driving behaviors identified by the systems, said Mr. Burgraff of Axa XL.

An overwhelming percentage of commercial auto claims exceeding $50 million in Axa XL’s portfolio involved fleets with telematics. It’s “not necessarily the use of telematics, it’s rather the misuse of telematics,” he said.

Broader adoption of safety technologies has been associated with lower liability losses. A May report by the American Transportation Research Institute found forward-collision warning, lane-departure warning, collision mitigation, adaptive cruise control, blind-spot detection and automatic emergency braking systems were linked to lower liability losses.

Technology does not replace experienced drivers or sound fleet management, said Matthew Payne, Kansas City-based transportation practice leader at Lockton.

Insurers continue to look closely at drivers’ experience, training, employment history, compliance scores and crash histories when evaluating fleets. “There is no substitute for a good driver,” he said.

Commercial Auto market still tough but easing

Commercial auto insurance buyers continue to see rate increases, although insurers have become less restrictive in deploying capacity for better-performing risks.

Insurers are no longer pulling back capacity as aggressively as they did several years ago, said Matthew Payne, Kansas City, Missouri-based transportation practice leader at Lockton.

“The market’s calmed down. It’s not soft by any stretch of the imagination. It’s not like we’re seeing rate decreases, but insurance carriers are more comfortable with appetite,” he said.

Commercial auto remains an unprofitable line as insurers continue to grapple with rising claims severity driven by increased settlements and court awards and higher repair costs, according to mid-year broker reports.

Many insurers continue to seek rate increases as they work to improve profitability, said Mark Gallagher, West Des Moines, Iowa-based vice president, national transportation at Risk Placement Services, the wholesale division of Arthur J. Gallagher & Co.

Accounts with strong safety records, experienced drivers and stable operations are generally seeing more favorable renewals, while those with poor loss experience or greater volatility could face rate increases from the high single digits to 25% or more and, in some cases, nonrenewal, he said.

“The commercial auto industry has struggled for the better part of the last 15 years, with combined loss ratios over 100,” Mr. Gallagher said.

Commercial auto net underwriting losses more than halved to $2.2 billion in 2025 from $4.9 billion in 2024, while the combined ratio improved to 102.7 from 107.2, according to A.M. Best.

Large commercial fleets are increasingly retaining more risk through higher deductibles, said Rick Burgraff, New York-based head of excess casualty, East zone, at Axa XL, a division of Axa. Deductibles for fleets of 500 vehicles or more typically start at $1 million and can reach $20 million, he said.