High-risk drivers are the number one concern of safety managers. From a financial perspective, that certainly stands to reason: 80 percent of insurance claims are generated by the worst five percent of the driver pool, and truck accident lawsuits settle for as much as $10 million. These are just a few of the issues being addressed by information services company IVOX, the newest member of Georgia Tech’s Advanced Technology Development Center (ATDC).
IVOX uses an innovative, patent-pending algorithm to calculate driver ranking information. Similar to a credit score that assesses financial risk, IVOX’s DriverScore® assesses a driver’s accident risk – information that can be used by commercial trucking fleets and the insurance industry to better manage risk.
“Driver behavior data is derived from the global positioning system accelerometer boxes that are installed in trucks and cars, and the data is processed through a patent-pending, risk-weighted algorithm to determine the DriverScore,” explained Gregg Warren, founder and CEO of IVOX. “We have the ability to assess data at a granular level – both for intuitive and non-intuitive risks – and the capacity to predict specific driver behavior.”
The timing is right for a company like IVOX, since commercial fleet accidents are a $300 billion-a-year problem. In addition to insurance claims and regulatory fees, lost productivity impacts the entire economy. Most importantly, Warren wants his product to save lives by improving highway safety.
“DriverScore incorporates elements such as speeding, aggressive driving, time of day and route risk. The score is like a golf score – the higher the score, the worse the driver,” Warren noted. “In the commercial trucking industry, there’s a lot of data, but not a lot of information. Our product allows that data to be utilized in an effective way.”
IVOX directly targets large commercial self-insured fleets and insurance companies for both personal vehicles and commercial fleet clients. By 2012, Warren projects that IVOX’s potential market will be worth more than $5 billion.
Already, IVOX is creating buzz. The company won a business launch competition last May sponsored by the Georgia Research Alliance and the Technology Association of Georgia. The grand prize was $100,000 cash and a service package worth nearly $200,000.
“We were gratified by the win, but also feel a responsibility,” said Warren, who developed the idea for IVOX from his years of consulting to the wireless and financial services industries. “We want to drive demand and let the transportation industry know that all of these issues impact line item cost.”
IVOX delivers its product via the Web, and its revenue model includes monthly monitoring fees (generally $15 to $20 per vehicle), implementation fees and consulting fees. Warren projects that a large portion of IVOX’s later term business revenues will come from licensing agreements.
“There is no national claim database. State departments of transportation can tell you how many crashes there are at a particular point, but that doesn’t mean it’s a high propensity for accidents,” he said. “We have to normalize it for traffic and class of road on a state-by-state basis. It’s more laborious, but it has to be done that way to accurately assess risk.”
According to Warren, IVOX’s competitors include pay-as-you-drive insurance companies, video-based accident reconstruction companies, device-based companies that sell the GPS accelerometer boxes and consultants. However, he said there are no competitors thinking about the intellectual property around risk assessment like IVOX.
“We’re constantly thinking about risk and what impacts it. No one else can replicate this – they’ll have to license it from us,” he explained. “We have the ability to marry GPS and GIS data with risk assessment. The goal is to have a smart learning data model, so when accidents do occur, we can become smarter about it and adapt and develop new algorithms.”
IVOX recently signed an agreement with a top 10 property and casualty insurance company and has an agreement in principle with one of the top two fleet finance companies – two proposals totaling 9,000 commercial vehicles. Already, there are 15,000 vehicles in IVOX’s database.
“In the near future, we want to close five to six million dollars in funding and roll out our products and services,” Warren said. “We have a conceptual product that works, but to make it truly work we have to match the scale of our demand.”
Warren, who expects to employ 18 people by the end of this year and 47 by the end of 2008, says this is an exciting time for IVOX.
“We’re excited about being in Atlanta. We can draw from Georgia Tech’s Ph.D. program in GIS and GPS, Georgia State’s graduate-level program in actuarial science and mathematics and statistics programs at Emory, Georgia State and Georgia Tech,” he noted. “We think that we can be the next great technology company that Georgia can hang its hat on.”
IVOX is also proud to be an ADTC company: “The ATDC has a strong history of nurturing technology startups in Georgia, and we look forward to learning from their experience and leveraging the many resources the ATDC has to offer IVOX,” said Warren.
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Writer: Nancy Fullbright