HOW CAN A FLEET RISK MANAGEMENT PROGRAM SAVE MONEY FOR THE FLEET?

As we present to fleets, this question comes up regularly because, quite rightly, any new investment needs to be cost-justified and in the area of Fleet Risk, many decision-makers still view this kind of program as a ‘nice-to-have’ as opposed to an essential aspect of running a fleet.

 

In overview terms, RVM sees four main areas of potential savings and several smaller areas that are available (to greater or lesser degrees) as a result of choosing our “Full Circle” solution:

 

Fleet Insurance Costs – Typical Insurance Savings: 10% to 25% of Premium

 

First; we see an opportunity to reduce fleet insurance costs from many angles of view. Clearly premiums are partly determined by both claim numbers and costs incurred so by reducing frequency of claims and managing accidents more closely, both these areas can be reduced.

 

The fleet insurance broker can also play a key role in helping negotiate down the premium by explaining the aims, scope and depth of the risk program to the Insurer, who would be keen to encourage any proactive risk reduction initiative the fleet decides upon.

 

As confidence in the fleet’s ability to control risk increases over time, the fleet may choose to buy less insurance by taking cover based on Third Party Only or a bigger policy excess, which will also result in a smaller premium.

 

Accident Management Costs – Typical Claims Savings: 15% to 30% of Costs

 

Second; a repair bill that lands on a fleet manager’s desk isn’t the only cost arising from an accident. There are lots of hidden ones too, such as employee time lost and administration. In theory, including accident management within your fleet risk management program should be able to minimise some, or all, of the hidden costs associated with an accident.  By offering vehicle downtime control, pre-negotiated supplier terms, engineering assessments to agree the most cost effective method of repair, third party intervention and effective uninsured loss recovery, lots of savings can be made.

 

Savings By Outsourcing: 50% to 100% of current in-house spend

 

Third; much time and money is spent by fleets in trying to carry out certain risk functions in-house and alongside other duties.  These functions could be much more efficiently carried out by a specialist supplier delivering a tailored solution to the fleet.

 

Examples of potentially outsourced functions might include the delivery of the risk products to the drivers, the consolidation of accumulated risk data, the analysis of what represents high risks, the decision-making around what remedial action to take, the measuring of how effective the program has been.

 

Many fleets tend to have more than one supplier when it comes to managing risk.  This automatically builds in extra costs as the fleets pays more than one profit cost, holds several supplier review meetings, pays more than one invoice and negotiates several contracts.

 

By placing all aspects of the risk program through one supplier, the data is automatically consolidated, there’s only one price, one meeting, one bill, one set of management reports, one account manager and one contract. This represents a potentially large saving compared to dealing with several suppliers.

 

Savings from finding undiscovered high risks: 10% to 30% of accident costs

 

Four; currently there may be several high risk aspects to running a fleet that are going undiscovered and that therefore represent a higher risk that extra cost will be incurred compared to what would be the case if they were discovered and rectified.

 

Clearly the opportunity cost of eradicating high risk situations is difficult to measure and is driven partly by how the fleet risk is currently being assessed.  However, for a fleet that doesn’t assess fleet risk, this could be significant source of savings.

 

 

At RVM our integrated approach allows us to help fleets to implement effective safety policies, analyse trends and identify high risk drivers. Our Driver Training program is targeted, timely and appropriate.  The result is lower accident rates, improved driver safety, and reduced costs.

 

Call us at RVM Assist Ltd on 0113 224 8800 or visit our website at www.rvmassist.co.uk if you want to save money through our “Full Circle” program.

 

“Fleet risk strategy …… how to see the wood for the trees”

"So how am I supposed to pull all this fleet risk data together and come to some sensible conclusions when I have all these other fleet responsibilities to deal with?"

The feedback we get from fleets is sometimes relating to ‘why invest in Risk management’, but more usually it’s about lack of resources – not just time resources but also expertise in deciding what’s the best course of action.

Of course, it’s easy to outsource claims, licence checking, telematics, driver training and online assessments BUT fleets don’t always realise they are creating a monster in so doing.

The reasons are as follows:

·         Risk data starts pouring in via portals, emails and hard copy reports

·         The data comes in at different times of the year and in different formats

·         It’s not always clear what the data is trying to say so analysing it is time-consuming

·         How to decide what represents a high risk and what should be done about it, is a problem

·         Having dealt with high risk drivers, how do you make sure the action taken, has worked?

Managers with fleet responsibilities usually have other functions to perform so it is not easy to find time to bring all of these Fleet Risk elements together in a way that maximises their effectiveness.

Indeed, very often the three departments of Fleet, HR and Health & Safety will take responsibility for different elements of the road risk program, which further complicates the harmonising of data and often results in missed opportunities to reduce risk.

So, apart from lack of time, internal risk expertise and departmental structure issues, most fleets also lack the other key element to make a risk program successful and that is a satisfactory electronic receptacle into which they can deposit all the risk data and also check that none of it exceeds the organisation’s minimum risk levels.

The net result of all these hurdles for a fleet is that risks get overlooked, which is not only dangerous, it risks the fleet becoming guilty of ‘willful blindness’. Furthermore, some fleets actually choose to turn a blind eye to high risk data because even if they know what to do about it – they often don’t have the time or resources to resolve it!

This is where the outsourced risk management industry is able to lend a hand in planning a program that is fit-for-purpose in terms of available budget and program objectives.

At RVM we build tailored risk management programs for fleets based on what priorities the fleet has identified.  These range from the very simple to the most complex depending on fleet profile, what needs outsourcing and what stage of the risk journey the fleet is currently at.

We work on raising safety culture levels within a driving population and by offering a supportive approach to improving drivers’ skill, habits and on-road behaviour. 

The upside is that by choosing an approach that is designed to seek and iron out bad driving habits, a fleet will gain the support of its drivers, which in turn means its high risks can be identified and worked upon. 

Additionally, this will show that a duty of care exists and a better claims record will follow.  Insurance costs will come down and driving safety becomes second nature and integral to the driving culture. Wilful blindness won’t be possible and won’t therefore be a threat.

In our experience, when a fleet chooses to invest in our approach, it wants a positive and tangible benefit in return and this is why, at RVM, our efforts are focused on our mission to reduce accident frequency. 

So don’t choose to rely on lady luck when you renew your fleet insurance policy. Take a more positive view by controlling fleet risk with RVM as your guide and partner. Learn more about what options are open to you and at what cost by calling RVM on 0113 224 8800 or contact us here or e-mail us on risk@rvmassist.co.uk

At RVM Assist Ltd our integrated approach allows us to help fleets to implement effective safety policies, analyse trends and identify high risk drivers. Our Driver Training program is targeted, timely and appropriate.  The result is lower accident rates, improved driver safety, and reduced costs.

Why is the need to integrate sources of fleet risk data so important?

What is the issue here?

In the latter part of the 20^th century, we saw a dramatic rise in the use of contract hire as a way of acquiring motor vehicles for business.  The reason was not just because it was off-balance sheet but because in one monthly payment, the fleet could buy an integrated solution that included acquisition, disposal, funding and maintenance.

As we now view the need for safety compliance in fleet risk as well as the drive for reduced accident claims, it is hard not to draw a parallel with the contract hire industry.  This is because fleets are again faced with a multi-faceted hurdle in checking licences, profiling and training drivers, controlling grey fleet and optimising claims handling.

To further complicate matters, whilst fleets are perfectly capable of buying these services (from lease providers, insurance companies and other providers), very often the fleet is left on its own when faced with deciding which to buy, how much to buy, at what price, for what reason and with what results. 

Why is this an issue?

Clearly, different fleets have different resources in this area depending on their size and their appetite to engage in a program designed to reduce road risk.  Despite these variations, common needs of all fleets are:

1.     to integrate all risk data into one, visible, accessible location,

2.     to be able to test risk data inputs instantly for severity using consistent parameters,

3.     to quickly implement pre-agreed remedial actions arising from higher risks,

4.     to check if the action taken achieved the overall program objective.

Given all this work, on top of implementing the risk services themselves, it is easy to see that for a fleet to achieve its overall objective to reduce road risk, demands a sophisticated integration of several sources of dynamic data.  Regrettably for the fleet, reducing road risk via the tools above, represents a relatively new concept and therefore not easy to do in-house via an off-the-shelf software application. As a consequence it becomes a manual and time-consuming job that creates delays and thereby, perversely, increases risk!

Even if systems were available, the fleet would need expertise to decide how to interpret levels of risk and indeed what to do about them. This falls within the scope of skills of a risk co-ordinator that knows what has worked in the past and without that knowledge, a fleet is left only with the option of experimenting in the hope the type of remedial action taken does in fact reduce risk.

Another challenge for fleets is in making sure the integration of risk data occurs consistently throughout the year because the time delay between a risk being identified and the cure being applied does have an impact on how effectively the cure works.  For example if a driver that has a blameworthy incident due to poor roundabout technique, receives training on that problem more than three months after the incident, its relevance (and the longevity of the training message) is lower than if it were carried out two weeks after the incident.

The solution?

• The fleet should seek advice as to where it sits in terms of safety initiatives and what would be necessary to raise that level to a point that is compatible with the organisation’s aspiration
•  The fleet should then create a solution-led (as opposed to product-led) road risk reduction program in partnership with a specialist risk management supplier that focuses on raising safety culture amongst drivers
• The fleet should select a single supplier that can offer all the risk tools as one cohesive solution (including claims) supplied by one accessible team that appoints one personal risk manager to every driver.
• The supplier should offer reliable advice on how to interpret multiple sources of driver profiling data so as to maximize the effectiveness of any remedial action 
•  Connections between principal causes of risk and potential remedial action should be pre-empted and defined so there’s a pre-set matrix that takes in all eventualities 
• The lead time between risk causation and remedial action needs to be shorter so as to increase the effectiveness of the curative measures.

At RVM Fleet Services our integrated approach allows us to help fleets to implement effective safety policies, analyse trends and identify high risk drivers. Our Driver Training program is targeted, timely and appropriate.  The result is lower accident rates, improved driver safety, and reduced costs.

Contact us now on 01132248888 or e-mail risk@rvmfleetservices.co.uk to find out more.