Driver Incentives v Disincentives as Tools for Accident Reduction

Many fleets will support an accident reduction strategy with either driver incentive schemes or penalties for failing to meet new targets.  So just how effective are such measures in reducing claims and which approach works best?

A Policy for Dishonesty?

Incentives and disincentives can both have the effect of driving claims underground if they are too heavy-handed. By financially rewarding collision free driving you may encourage drivers to stop reporting small bumps. Drivers who face financial penalties for accident claims are arguably even more likely to withhold information.

Carrots and Sticks

The decision fleets must make is whether their drivers will be more likely to abide by culture change and act on the knowledge gained through training if there is a carrot in front of them or a stick behind. At RVM we believe carrots often have a greater influence on driver behaviour because they accentuate the positive but we also know that to be truly effective drivers need to understand why they are being incentivised. Once they grasp the business reasons and safety benefits of accident reduction they will be motivated by more than just the short term prize.

The Right Carrot

Like all incentives, driver rewards must be meaningful or they will simply be ignored. Popular incentives include cash bonuses, vouchers, eligibility for a vehicle upgrade or just recognition of good behaviour with the potential for a “driver of the year” badge of honour. In many cases, introducing an element of competition amongst employees can work extremely well and most fleets find that longer term goals are more successful and make it easier to measure improvements over time.

Act Now

Driver incentives not only help to set a pattern of positive behaviour, they also encourage employees to see improvement as a goal and to share their successes with one another. This in itself helps to perpetuate good driving principles. However, incentive schemes need to be designed to fit the fleet and whereas a leader table may work in a fleet where all drivers perform similar roles, other organisations may need a different system with rewards designed to match specific roles or achievements.

Click here if you need help designing an incentive scheme for your fleet?  

or Call RVM today on 0113224 8888 to discuss in more detail.

How to Make Your Fleet Carbon Neutral

Cutting carbon emissions and improving environmental credentials is back on the agenda since we now know that climate change is caused by humans. However, for many businesses, pollution from the fleet represents the most substantial element of their environmental footprint. 

Regrettably, offsetting or reducing greenhouse gas emissions is not yet a legal requirement and in times of recession it’s not surprising it therefore slips down the priority list for most businesses.  

 

Notwithstanding this, at RVM we take a more positive view.  Our experience shows that businesses would like to be able to improve and demonstrate their corporate social responsibility.  

Additionally, major elements of a typical Tender response will now require you to show how your business minimises its impact on the environment.  Thirdly, if you’re a ‘plc’, you have to include a report on your greenhouse gas emissions as part of your annual report and accounts.

Bitter pills are often easier to swallow if you put them with something sweet!  In other words, we believe the cost of offsetting the carbon footprint of your fleet should be absorbed into other associated services in which a fleet needs to invest.  In doing just that, RVM can ease the financial burden, whilst offering all the benefits.

By measuring the carbon footprint of your fleet we can calculate how many verified carbon units we need to buy on your behalf to offset your emissions. A certificate verifies our investment on your behalf into a specific forestry project in the developing world.

Quality and traceability are essential in any green business initiative and our carbon credits are certified by internationally recognised standards such as the ‘Verified Carbon Standard’ (VCS) and the ‘Climate, Community and Biodiversity’ (CCB) standard.

By integrating the offset scheme into all our accident and risk management services as standard we are giving our fleet clients peace of mind that their fleet operations are as green as possible. 

Find out how you can become a Carbon Neutral Fleet at - http://ow.ly/p18dJ

How Accurate Are Your Fleet’s Average Repair Costs?

Average repair costs should be a crucial metric for fleets, influencing key operational decisions as well as repair strategy.  It therefore seems incomprehensible that there is no industry standard for calculating this figure so that fleet managers can make true comparisons with confidence.

If just a few of the larger repairs are missing, the mathematical result can be grossly understated and in this way companies can be easily misled into believing that repair costs are better than they really are.  

So how can fleets verify the accuracy of their average repair costs?

Any assessment of repair costs should be for a finite period and must include all repairs incurred in that timeframe.  The figures used should be the full and actual cost incurred before any commissions or discounts. It should be noted that excessive commissions may in themselves result in raising the average as invoices may be inflated to cushion the impact on repairer profitability.

Not all claims should be included in average repair cost calculations. If there was no damage recorded or if damage was recorded but no repair work was carried out then it could be argued that in calculating average repair costs these cases should be excluded from ‘total number of cases’ when dividing it into ‘total repair costs’.

An accurate calculation must take into account all repairs performed for a particular fleet in a particular period, including smart and express repairs and additionally, any costs that don’t relate to repairs must be excluded.

These are just some of the issues surrounding the reasons why the current calculation of average repair cost is not relied upon more often.  If the figure were valid and reliable, fleet managers could make wiser decisions in the light of knowledge instead of casting around for the truth.

Better decisions about what kind of repairs, bought from where, via whom and on what terms would lead to lower repair costs and subsequently lower insurance premiums.

Lack of clarity in calculating average repair cost will continue to frustrate this procurement objective resulting in fleets acting on hunches and “gut feel”.  In this day and age with all the computing power at our fingertips, decisions should be able to flow from accurate and reliable data.

The fleet industry needs a standard method for calculating average repair costs. Until then RVM is offering companies a free assessment of their average repair costs to confirm accuracy and uncover errors or miscalculations.

How accurate are your average repair costs? For a FREE assessment click here to book an appointment or call 0113 2248888

Raising Driver Safety Profiles is the key to reducing the frequency and cost of accidents

The Facts:

1. To reduce fleet insurance premiums you need to reduce frequency and cost of claims
2. To reduce frequency and cost of claims you need to raise the driving safety profile of the insured drivers
3. To raise the driving safety profile of insured drivers you need to work with each driver, assess and train them.

For RVM, the assessment and training needs to be presented to drivers as a positive and supportive process in order to avoid the result of dis-incentivising or even over-incentivising drivers.

Awarding or punishing drivers can lead to non-reporting of damage or the driver paying personally for sub-standard low-cost repairs, both of which can have unacceptable consequences for a well-run fleet.

Non-reporting of damage leads to extra cost when the vehicle is returned to the lease company as well as other problems such as poor brand image and even safety and legal issues. Sub-standard repairs can also carry safety risks and lower residual values.

The importance of assessment, education and training

The issue therefore for a fleet is how to raise the safety profile by assessing and training drivers in a supportive manner.  Communication is crucial. It’s important to engage with your drivers fully so that they can have confidence in any safety initiatives introduced.

They need to know what you are doing, why you are doing it and how it affects them. 

Assessment, education and training needs to be at the heart of any approach to fleet safety, there needs to be a range of initiatives aimed at raising the safety profile of these drivers.

Answering the tricky questions

Once you have the drivers on board, you then need to look at things from a practical viewpoint in terms of implementing these initiatives. Fleets often find themselves asking the following questions:

•    Should we use internal resource or external or a blend of both?
•    How can we bring all risk result data into one receptacle?
•    Which external resources should we buy and at what cost?
•    What rules should we apply to measure what constitutes a high risk?
•    How should we then deal with high risks in terms of appropriate action?
•    What measures are available to identify success or failure of the investment?

For a fleet that wants to control road risk more effectively these questions are tricky to answer without specialist guidance.

On behalf of our clients, we constantly trawl the market for the best products and prices and internally we have trained risk managers using specialist software so that we can answer all these questions for you.

To find out the answers call us on 0113 224 8888 or visit our website www.rvmfleetservices.co.uk

Is your fleet risk reducing?

Are you in this position yet..?

• Accident management is in place
• The drivers are being trained
• The on-line driver assessments are being completed
• Grey fleet is under control
• Licence checking company is operational
• Last year’s claims statistics are available
• Appointment in the diary with the FD to review next year’s insurance costs
• Fleet size is more or less the same as last year
• All road risk data has is available in one receptacle
• The board remains committed to reducing road risk

Is your fleet risk program working?

Now, what we need to look at is whether the program is working and whether fleet risk is reducing. The answers to these questions are more complex than you might imagine.

Points to consider…

• What information is available from whom and in what format?
• Who will have the responsibility of collating this data in such a way that useful conclusions can be drawn?
• When should this exercise take place given that the insurance renewal dates may different to the financial year end and outsourced services will have varying review dates?

Whilst some fleets are now in this position many fleets will recognise from the above statements that they are not yet there. In practice there is more than one way gauge the success or failure of a road risk program.

How to gauge the success, or failure, of your road risk program

The following list may represent some good clues as to how to gauge the success or failure of a road risk program:

• Are insurance costs rising
• Feedback from drivers shows that the safety culture is more evident than previous years
• Are there more high risk or fewer high risks being identified as a part of the assessment stage
• Is claims frequency higher or lower than last year
• Are overall costs associated with claims rising 
• Do fault claims represent a higher or lower proportion of last year’s claims  
• Is the nature of the fault claims more or less serious than last year
• How many injuries have been incurred (own driver and third party)
•  Do total losses pose a financial threat
• How many more penalty points have drivers incurred compared last year

 

Pause once a year to reflect

These are just some of the examples of ways in which the effectiveness of a road risk program can be measured.

Of course best practice would indicate that fleets should pause once a year to reflect on the answers to these questions before starting the process of constructing the following year’s road risk program. 

Take a new approach

The Full Circle risk management program from RVM Fleet Services represents an exciting new approach to the way Fleets consume risk services.

In answering the points raised above, Full Circle can offer:

• A truly integrated and bespoke program
• Transparent view of the effectiveness of the chosen program
• Guaranteed service delivery by personal risk managers direct to drivers

 

For more information about Full Circle, or any of our fleet services, please contact us on 0113 2248888.

Gallagher Heath (retail insurance division) intends to develop closer links with RVM Fleet Services to provide fleets with a new approach to road risk management.

After working together successfully to bring tailored and specialist solutions to some of the fleet clients of this prominent and progressive broker, RVM Fleet Services is pleased to be able to broaden the scope of its arrangements.

David Plowman, Head of Risk Management at Gallagher Heath (Retail Division) commented:

 “Gallagher Heath Risk Management offers an audit service to our clients in relation to motor fleet risk management systems; these usually highlight a number of areas where elements of the (RVM) Full Circle product can be utilised. We have worked in a joined up fashion on a number of cases in the past…. and…. I would like to go down the route of formally considering an agreement to introduce RVM on our fleet book of business”

In response, Diana Rose, MD of RVM Fleet Services commented:

 “Our partnership with Gallagher Heath represents an enlightened approach by a major broker towards managing fleet road risks.  The partnership is a perfect fit as Gallagher Heath offer the risk consultancy advice and can follow through by delivering the solution via RVM.  Strong logic draws us together through our mutual desire to reduce the cost and frequency of road traffic accidents."

Full Circle represents a truly integrated approach to Road Risk Management in the way it is constructed and delivered.  It is made up of the following five service options:

• Driver Profiling
• Licence Checking
• Grey Fleet Monitoring
• Accident Management
• Driver Training

For more information visit www.rvmfleetservices.co.uk or contact us on 01132248898.

Grey Fleet Monitoring procedures - an essential guide.

Are you one of the 34% of organisations that do not have Grey Fleet Monitoring procedures in place?

Private car use for business is up

Latest figures from the HMRC puts the number of private cars used for business at up to four million - it’s an issue that employers and fleet managers cannot ignore.

34% of organisations admitted they do not have Grey Fleet procedures in place for checking: driving licences, mot certificates, insurance cover, road tax and service records (Department of Transport/HSE/ARVAL statistics).

Your legal 'Duty of Care' requirement

Employers owe the same duty of care to staff driving their own vehicles for work, as they do to employees driving company vehicles. There are a number of legal instruments in place to ensure that organisations honour duty of care.

These ‘instruments’ include the Health and Safety at Work Act, and the Corporate Manslaughter and Corporate Homicide Act. The Office of Government Commerce's best practice guide states that “both management and employees can be prosecuted for road traffic crashes involving work-related journeys, even when the driver is using their own vehicle”.

The need for robust policy

This means that organisations need robust policies and procedures in place to ensure that the car is fit for purpose, has a valid MoT, is insured for business use and that the employee has a valid driving licence.
Employers need to be able to demonstrate the steps they have taken to manage duty of care.

Click here for our FREE essential guide to Grey Fleet Monitoring 

To find out how we can help contact us on 01132248898.

Do you know your biggest fleet risks?

As an employer, you have a statutory duty of care under the Health and Safety at Work Act 1974 – that is, a burden exists for the employer to assess all the risks involved in employing drivers who are engaged in company business. 

Where do I start? 

It’s difficult for fleets to know where to start with this. Who do I assess? How do I do it in such a way that gives me the right answers?  What about cost? How will I know if it is working?  What types of supplier could help? Is it a service that can be outsourced?

Every fleet is at different stages in terms of progress to a better safety culture amongst drivers so many fleets might think: who knows how much more needs doing and how will I know when I’ve done enough?  It seems there are so many things to do and they cut across many departments in our business.

Expert Advice 

To have any hope of ending up where you need to be, a fleet may need expert advice up front to benchmark progress towards a stated objective. A fleet safety audit assignment must therefore provide the answers in a format that is useful and understandable to the fleet and additionally recommend a cost-effective forward path that is commercially acceptable to the fleet.

Key factors for a safety audit might include the following:

Drivers

Review the risk factors that affect your drivers, from recruitment through to day-to-day business activity. This includes the systems you may have in place for driver selection, assessment and training.

Vehicles

Considerations might be vehicle type, use of vehicle, whether they are ‘fit for purpose’, maintained and serviced appropriately.

Operational

Operational activities have a huge influence on the fleet risk factors within an organisation. You will need to consider the radius of travel, hours of operation, journey times etc. Your day-to-day business activity presents risk exposure that cannot always be eliminated however you can review and adjust your existing controls

Management Controls

Review the safety culture of your organisation, from the top down and how this extends to the day-to-day risks faced by drivers. Consider elements of driver-manager communication and supervision, policies and procedures, driver licence checking, incident reporting and investigation, and performance management.

Accident History

By analysing your incident or claims history, you can identify key contributing factors to incident causation, and offer specific remedial action to reduce these occurrences.

 

Road Risk Management must be fully inclusive in that the total risk must be subject to the process. The list above is by no means exhaustive and a fleet needs to ensure its investment in reducing road risk is broad enough to achieve the objective but also financially proportionate to the problem.

How we can help

At RVM Fleet Services we offer a Fleet Safety Audit which helps you to understand your exposure to risk by examining your existing management practices and procedures and also offers a straight forward benchmarking tool.  Through the process we identify the good, the bad and the ugly!  We believe openness is what our clients prefer and we cannot reduce frequency and cost by recommending a program that clearly won’t achieve it.

Whether you require a full Fleet Safety Audit or just some advice on your current arrangements, call us now to see how we can help you understand where your biggest fleet risk are and how we can help minimise these risks quickly, easily and most importantly, cost-effectively.

Questions? Then please contact us ...

Contact us now on 01132248888 or visit our website.

In Car Driver Training

Find out more about our in car driver training courses by clicking on the following link http://www.rvmfleetservices.co.uk/in-car-driver-training/