Arthur J. Gallagher & Co. · NYSE:AJG

Arthur J. Gallagher & — Telematics in Transportation webinar (December 2019)

30 slides from Arthur J. Gallagher &'s conference presentation, Dec 3, 2019

1. Slide 1: Telematics in Transportation

   Telematics in Transportation Chris Demetroulis, Jessica Cullen & David Gale | December 3, 2019 ©2019 ARTHUR J. GALLAGHER & CO.

2. Slide 2: Agenda

   Agenda Tuesday, December 3, 2019 I. Introduction to telematics II. Regulations in the transportation industry III. Rising insurance premiums IV. Netradyne presentation V. Reducing costs and improving safety 2 ©2019 ARTHUR J. GALLAGHER & CO. 2

3. Slide 3: Introduction to Telematics

   Introduction to Telematics ©2019 ARTHUR J. GALLAGHER & CO.

4. Slide 4: Introduction to telematics

   Introduction to telematics What can telematics offer? A. Improved safety & risk management 1. Opportunities for real-time driver coaching 2. Improved culture of safety B. Lower fuel expenses C. Efficient fleet management D. Regulatory compliance E. Total Cost of Risk Improvements 1. Variable and fix

5. Slide 5: Regulations in the Transportation Industry

   Regulations in the Transportation Industry ©2019 ARTHUR J. GALLAGHER & CO.

6. Slide 6: What are the industry regulations?

   What are the industry regulations? I. Electronic logging devices are mandatory for recording A. Engine use B. Miles driven C. Dates & times II. Facts A. About 1/3 of commercial fleets in U.S. still use paper records B. National Highway Traffic Safety Administration withdrew proposed regulation to re

7. Slide 7: Rising Insurance Premiums

   Rising Insurance Premiums ©2019 ARTHUR J. GALLAGHER & CO.

8. Slide 8: What does that mean for insurance costs?

   What does that mean for insurance costs? I. Q2 of 2019, premiums for commercial auto increased by 8.4% (Compared to an average of 4.6% for all other lines of coverage) II. Claims have become more expensive due to: A. Increased road congestion B. Distracted driving C. Decline in road quality D. Highe

9. Slide 9: What does that mean for insurance costs?

   What does that mean for insurance costs? Evolving Insurance Concerns I. Insurance companies are experiencing a higher frequency of “Nuclear” verdicts. A. 100% increase in the median nuclear verdict within the past 18 months from $23Mil to $48Mil II. Excess liability capacity is decreasing and insura

10. Slide 10: Netradyne Presentation

    Netradyne Presentation ©2019 ARTHUR J. GALLAGHER & CO.

11. Slide 11: Dash Camera Basics - Brief History

    Dash Camera Basics - Brief History Early 2000’s Mid 2000’s Today • SD Card “Loop” • Dual cameras (inward/outward) • 4 cameras + extendibility • Manual video retrieval • “Connected” with 2G/3G cellular • 4G/LTE connectivity + BT/Wi-Fi • Basic GPS • Inertially triggered events • A.I. event detection –

12. Slide 12: How does Driver-i work?

    How does work? Reasoning Every minute Insights Driver coaching and analyzed available & recognition causality for fleet (+Real Time and recorded identified by manager Feedback!) device Review and analysis Supercomputer Customizable Engagement with preformed at the device. with a camera dashboard for

13. Slide 13: dale willis

    dale willis dale [ss Following Distance De Following Distance : From Front eed Signs Speed Limit Sign Boards Detected > vednam

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18. Slide 18: Driver Distraction

    Driver Distraction Moderate Risk Level Details Driver Distraction : Looking At Phone

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20. Slide 20: Gamification, Competition, Recognition

    G A M I F I C AT I O N COMPETITION RECOGNITION Mobile App Driver Score Card Basis For Incentives 20 20

21. Slide 21: In-Cab Alerts / ADAS

    In-Cab Alerts / ADAS Fundamental shift from measuring risk - to immediate risk reduction -Removes management’s day-to-day coaching burden Available Today Future Releases (OTA) o Following Distance • Initial Pilot Results: o Aggressive Driving o Speeding Alerts  68% reduced tailgating o Forward Coll

22. Slide 22: Reducing Costs and Improving Safety

    Reducing Costs and Improving Safety ©2019 ARTHUR J. GALLAGHER & CO.

23. Slide 23: How can this reduce your cost & improve safety?

    How can this reduce your cost & improve safety? 43% of companies reduced fuel costs & 26% have seen fewer accidents I. Improves fuel consumption A. Monitoring driver behavior, tracking most effective routes, reducing amount of vehicle idling II. Increases driver safety A. Monitoring unsafe events (a

24. Slide 24: How can this reduce your cost & improve safety?

    How can this reduce your cost & improve safety? Improves driver performance 24 ©2019 ARTHUR J. GALLAGHER & CO. 24

25. Slide 25: Benefits to utilizing this technology

    Benefits to utilizing this technology Save time, reduce cost, increase driver safety I. Improve safety A. Companies that use telematics to improve safety reported that unsafe events decreased by nearly 50 percent amount day cab and sleeper cab groups. B. Driving a speeds of more than 65 mph fell by

26. Slide 26: Benefits to utilizing this technology

    Benefits to utilizing this technology 26 ©2019 ARTHUR J. GALLAGHER & CO. 26

27. Slide 27: Conclusion

    Conclusion Telematics and the future I. Rapidly evolving risk & technology A. Acceleration of technology advancement is exponential leading to rapid improvements B. Regulations may struggle to keep pace 1. Ex. (Distracted driving, increased value of vehicles, increasing nuclear verdicts without prop

28. Slide 28: Thank You!

    Thank You! Chris Demetroulis Managing Director | Gallagher Transportation Practice 816.329.0815 chris_demetroulis@ajg.com Jessica Cullen Managing Director | Gallagher Casualty Practice 212.981.2910 jessica_cullen@ajg.com David Gale Area Vice President | Gallagher Casualty Practice 212.994.7072 ©2019

29. Slide 29: Thank You!

    Thank You! Dale Willis – dale.willis@netradyne.com VP – Data Services and Insurance c:216.533.7895 29 29

30. Slide 30: Disclaimer

    Disclaimer The information contained herein is offered as insurance industry guidance and provided as an overview of current market risks and available coverages and is intended for discussion purposes only. This publication is not intended to offer legal advice or client-specific risk management ad

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