How Incident Management Software Can Lower Operational Costs

Accidents happen – how your drivers respond and manage the incident can make all the difference when navigating claims. As a Safety Director, it’s your job to set up an incident management process to capture all the details from the scene such as pictures, other party info, police agency information, etc.

Poor incident management often leads to delays which can increase claim costs, creating legal scenarios which could cause your overall insurance costs to increase.

Tim Brewster, Vice President of Loss Control & Claim Operations at National Interstate Insurance Company shared insights on rising costs: “Insurance costs are continuing to rise due to a variety of factors such as social inflation, the litigious society, rising medical costs, replacement value and repair values continuing to climb. The average commercial auto combined operating ratio in 2024 was forecasted north of 105. Meaning, on average, insurance carriers on the commercial auto line were losing at, minimum, 5 cents on the dollar. There are multiple things motor carriers can do to control their costs including, but not limited to, enhancing safety management controls, program structure changes and focusing on timely reporting of losses with appropriate information and collaborating with their claims adjuster.” 

Control what you can control: A fast triage and claims submission, process management that prevents details from falling through the cracks and risk management to look at trends. Motor carriers who use incident management software rather than spreadsheets (or no system at all) can benefit from a safer workplace which can help carriers better control outcomes which could lead to lower insurance and legal costs. The goal of strong incident management is to enhance timely reporting to the insurance carrier, contain costs by collecting relevant information and capturing trends so preventative measures can be implemented to prevent recurrences. 

The Role of Incident Management Software

When something happens on the road, your driver will likely be rattled and may even be injured. Depending on the severity of the incident, the scene may be chaotic, and they might not know what details to capture. This is when incident management software would come in handy.

It guides whoever takes that first call through the process of collecting specific data points, so you provide valuable insights to the insurance company to assist them in managing the claim with a goal of achieving the best outcome possible. It also allows you to analyze trends for future coaching opportunities and risk-mitigation efforts and gives you the ability to communicate with your insurance company or government agencies efficiently. 

Without incident management software, you may lack a systematic way to collect, analyze and share key information related to the safety event. The risks to your company could include the lower likelihood of a proactive approach which could result in higher insurance costs, not learning from your company’s own experiences and potential (possibly catastrophic) legal judgments.  

Key Ways Incident Management Software Can Lower Operational Costs

Insurance is about risk management. Underwriters know it’s a game of numbers (see Heinrich’s Law.) Your company’s safety record and your insurance premiums are inextricably linked as they evaluate your claims frequency and severity history among other factors such as lanes of travel, equipment, roadside data, technology, etc. 

When you have an incident, the best thing you can do is submit the claim as quickly as possible. Due to the litigious society, parties of the other vehicle(s) are being contacted, at times within hours, by law firms, and attorneys can be expensive. Best in class carriers are reporting losses to their insurance carriers immediately with valuable information to assist the insurance carrier in proactively starting their investigation and taking control to do their best to achieve positive outcomes. Claims that go to trial can cost thousands of dollars per day in court to fight, even if you’re right. Reassure the other parties that you’re committed to a fair resolve, so they feel confident and well cared for throughout the process. The longer this drags on, the worse it gets for you.

At National Interstate, their team of claims experts launched an early resolution initiative in 2023. This strategic approach helps them achieve better claims results and tighter control of spending by creating settlement opportunities earlier, faster and sooner in the lifecycle of a claim prior to claimant attorney involvement and litigation spend by disrupting the traditional claims process. In fact, when coverage is not in question and liability is not in dispute, upon first contact with the claimant prior to claimant attorney intervention, we have about an 80% success rate in settling claims when we had the opportunity to make the offer to the claimant.

Additionally, incident management software can help lower administrative costs related to working with your insurance company by reducing the amount of time it takes your team members to access and share files, reports and other data between parties. 

Control your claims frequency by creating targeted safety campaigns based on your top recurring issues of accident type, locations, custom sites, etc. Control what you can control: 

• Frequent and brief coaching for unsafe behaviors before they become incidents
• Preventative courses to address fleetwide trends
• Personalized hands-on coaching with discipline for incidents 

National Interstate encourages speedy claims reporting, noting “we would prefer you send us the key information you have immediately versus wait to collect everything. Although, please continue to proactively provide details as they are received. This is why we’re so excited to see a solution to submit a claim with the key early data, photos and videos from their phone.” 

Choosing the Right Software

To limit risk, improve safety outcomes and have more control over your insurance costs, your incident management software must make it easy to capture information at the scene, analyze your data and communicate incident-related information internally and externally. 

Data Capture

It all starts with the first notice of loss (FNOL) report. The driver collects these pertinent details at the scene to ensure you, as the Safety Director, have what you need to submit an insurance claim. Ideally, your incident management software prompts you to complete FNOL details and integrates them with your telematics, ELD and dashcam providers, giving you easy access to photos and videos from the incident. If you are submitting an insurance claim, speed is of the essence to help keep claims costs from increasing.

Data Analysis 

You can’t manage what you don’t measure. Comprehensive incident management platforms feature a dashboard that puts relevant data in your face to help you prioritize open incidents and assess how to mitigate risk in the future. Key data points to analyze include incident categories, such as location, weather and driver tenure, so you can coach drivers to avoid similar situations in the future. 

Data Distribution 

Effective incident management platforms also should facilitate submitting insurance claims, filing annual reports with the FMCSA’s Accident Register and exporting information to your insurance carrier at the time of renewal. The ability to store and share incident-related videos, photos and files from other parties such as your telematics vendor are another key piece of the puzzle. 

At Avatar, we’re proud to say we’ve incorporated these data capture, analysis and distribution features into our new Incident Management feature. We built it with input from insurance companies, like National Interstate, to make sure Safety Directors get them the right information ASAP to handle claims as promptly and cost effectively as possible. Our goal is to ultimately help you keep the roads safe and incident-free while keeping rising insurance costs at bay. Ready to learn more? Get started with Avatar.

The information presented in this publication is intended to provide guidance and is not intended as a legal interpretation of any federal, state or local laws, rules or regulations applicable to your business.  The loss prevention information provided is intended only to assist policyholders in the management of potential loss producing conditions involving their premises and/or operations based on generally accepted safe practices.  In providing such information, National Interstate Insurance Company does not warrant that all potential hazards or conditions have been evaluated or can be controlled.  It is not intended as an offer to write insurance for such conditions or exposures.  The liability of National Interstate Insurance Company and its affiliated insurers is limited to the terms, limits and conditions of the insurance policies underwritten by any of them.  National Interstate Insurance Company, 3250 Interstate Drive, Richfield, OH 44286.