Tuesday, 17 December 2013

FLEET RISK COST versus FLEET INSURANCE COST



As was revealed in a recent survey (by Tom Tom Business), 40% of fleets suffered insurance premium rises in the last year and 24% admit they don’t really know what they’re required to do in terms of managing road risk.

These statistics combined are very illuminating because they imply that despite rising insurance premiums, many fleets don’t know what to do about it.  

It was only a matter of time before fleet premiums started to go in the same direction as retail premiums and this research appears to indicate a significant proportion of fleets are going to have to dig deeper or buy less insurance by increasing policy excesses or lowering cover levels.

The truth is that risk will inevitably transfer to the fleet from the Insurer if less cover is bought and it is in this scenario that fleets need to look ever more closely at how their drivers behave on the road when driving fleet vehicles under fleet insurance.

The main issue for a fleet is how to make sure that savings (including reduced claim experience) are not swallowed up by the cost of achieving those savings?  In other words, what is the point in spending money on a road risk management program if the cost exceeds its benefit?

Additionally, as a relatively new concept for fleets, how do you know if your particular type of risk program will result in the scale of savings a fleet would be happy with?  

It is easy to have sympathy with these points of view because this area of risk management is not mandated through statute and if it were not so closely associated to insurance costs, a fleet could rely on luck to avoid prosecution if it all goes wrong!

What seem to be missing are one or two key factors that would make investing in road risk reduction a more palatable and justified decision.  Factors such as an element of risk-sharing between risk management supplier and the fleet so that a service provider can participate financially in the success of the program and the contrary if risk increases.

Alternatively, the fleet can make savings through aggregating a number of related risk services through one provider to cut cost and also to gain the benefit of all risk data being in one receptacle so that planning and accountability can be optimised.

Finally, a fleet needs a partner who has risk reduction as its core mission.  A service provider that doesn’t just sell risk tools as stand-alone products but one that brings the results to life by identifying and presenting improvement opportunities from real data and who has a genuine interest in seeing the fleet enjoy the benefit of reduced accident frequency and cost.

If this approach appeals to you then please contact us here or by calling 0113 2248898.







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