Why Accident Causation is key to Fleet Risk Reduction

Most organisations understand the value of fleet risk reduction initiatives and how they can generate quantifiable results.

The Benefits of including Claims

An enduring risk reduction strategy relies on regular analysis and review of data that comes from all aspects of road risk, including claims.  Many fleets look at licence check results and online assessment results for clues as to how to proceed but often miss an important ingredient - a real understanding of claim causation.

A short-sighted risk reduction strategy omits to really understand why accidents happen and key objectives may fall short as a result.  Equally, where a company’s internal procedures may be having an influence on accident rates, risk reduction initiatives will have only a limited effect.

By studying the causes of claims within a fleet it is possible to identify the most common incident types which, in turn, will lead to decisions about the changes that need to be made to reduce accident frequency.

These changes could include training but they may also require a rethink on other things such as car park geography (if this is where most minor incidents are occurring) or journey planning for drivers, for instance.

Of course, accidents occur throughout the year, which means information is accumulating to form trends and exceptions. So once a fleet includes accidents within the scope of risk management, we need to take a longer-term view.

The Long Term View

A difficult message to get across is the importance of a longer term view of risk management as many fleets see the process as having an end date.  In truth, drivers need a constant drip-feed of the safety message and management need to make sure future changes to company policies do not impact road safety negatively.

If a fleet operator has ticked all the safety boxes by implementing a broad risk reduction scheme, management may assume the job is done and then implement operational changes that undo all that good work.  Logically, a short term fix does not apply to safety culture change.  Such a broad-reaching and long-term objective takes time; it is fragile and can be quickly and easily undone.

From our research, fleets are good at fixing one-off problems but not so good at consistently applying long-term changes.  Equally, when under pressure, a reaction to an immediate business need will cause safety to slip down the priority list.

As a result, specialist help from an outsourced supplier (that is only focused on reducing accident frequency and cost) may be the way to achieve the long term view.

How RVM Can Help

RVM’s expertise in fleet accident management led to the development of our all-encompassing road risk management programme: Full Circle. 

The reason an inclusive solution is better for fleets is because it is simpler, cheaper and more accountable because all the data is in one place via one portal controlled by one team on one number under one contract and for just one monthly payment.

Working in response to client feedback, Full Circle from RVM represents an outsourced and packaged solution that facilitates consistent and long-term action directly with drivers.

Outsourcing all aspects of risk to one supplier also solves other fleet challenges such as:

• Assessing risk data from several suppliers or sources
•  Setting fleet-wide risk tolerance policies
•  Monitoring the success of risk reduction measures
•  Measuring results against agreed safety policy objectives

Full Circle integrates the principal elements of a road risk program including:

• Driver profiling 
• Driver training
• Licence checking 
• Grey fleet monitoring 
•  Accident management

Not only does this integrated approach allow a fleet to refine its risk reduction policies in line with internal and external influencing factors but it uses accident management as a tool to refine risk tactics as well as to prove if those tactics are working or not.

Permanently Lower Your Fleet’s Risk - Enquire now about Full Circle with RVM Fleet Services

To pay a fee or not to pay a fee? In fleet accident management, that is the question.

Outsourced fleet accident management has been available as an alternative to in-house and Insurer claims departments for nearly thirty years. The industry prevails for many reasons but now exists in different forms and with different interests.

In theory the service should be tuned according to the fleet’s priorities, provide more transparency (with which better decisions can be made) and also save everyone both time and money. In practice, the service is very often inflexible, income streams are hidden and the scheme is not set up to add value along the whole chain.

Furthermore, fleets who buy the service need to be aware of the fundamental differences that exist between a zero fee scheme and one in which the scale of the income receiveable by the service provider is both known and controlled.

Levels of transparency 

In the case where a fleet chooses to pay a fee for fleet accident management, it is reasonable to expect the service provider to really focus on lowering the cost and frequency of claims. This is because rebates and commissions paid to the service provider (in exchange for volume) can be set at a level that will not inflate the charges made.

Objectives can thus be aligned and both supplier and customer are pulling in the same direction. In the case where a fleet chooses a zero fee scheme, the principle of deriving income from sub-contractors is understood although very often the scope and scale of that income is not.

Of course, the fleet also has less room to complain about charge levels if the scheme is ostensibly ‘free’. The issue here is that very often there are no constraining factors on the scale of commission paid because it is hidden in a contract between the accident management provider and its sub-contractor and by consequence the more claims-related transactions there are, the more income is available.

Potentially, in this instance, objectives are therefore not aligned and conflict emerges as the service provider seeks income and the fleet seeks savings.

Warning Signs 

Sadly, not all fleet accident management providers offer the same transparency and service as we do. One of the greatest challenges for fleet managers is in understanding how and why this might impact them. First let's tackle the anwer to "why".

For most fleets no news is regarded as good news. In other words if the scheme doesn't create complaints and requires little intervention, most fleets regard it as a success. This is despite the fact behind the scenes the scheme may be out of control. That brings us neatly to "how" lack of transparency can impact a fleet.

The following points should provide food for thought:

• Recently we wrote an article on the importance of measuring average repair cost which suggested that, as a metric, a fleet could use it to identify if your choice of accident management supplier was wise.

• Other visible indicators might include how flexible your supplier is in choosing sub-contractors (such as repairers, hire companies, solicitors and recovery agents).

• Clearly management information is useful when examining how the fleet ‘behaves’ but claims reports are often quite poor in showing how the supplier (and its sub-contractors) has ‘behaved’.

• Does the fleet enjoy the benefit of co-operation between its Insurer and its accident management supplier? If these parties are frustrating each other then the only loser is the fleet itself – as premiums rise.

• Fleets expect their supplier to recover uninsured losses where there appears to be an opportunity to do so. Lack of transparency could be shrouding poor performance in establishing liability, lack of assertive recovery techniques or indeed slow reimbursement of cash to the fleet.

Zero Fee Mechanisms 

The points above make for grim reading for those fleets that enjoy a zero fee arrangement but are not sure if that benefit creates an unacceptable compromise in terms of what they end up paying. Here at RVM we understand how and why the zero fee mechanism has flourished and we appreciate that fleet managers need options if there’s no budget for fees but still a need for the service.

Due to lack of transparency, fleets go into zero fee arrangements thinking rebates and commissions payable to the service provider will be set at levels that simply compensate for the lack of a fee. In reality the income represents a level of compensation that may go well beyond that.

Nobody wants nasty surprises in business because it means someone should have known what was happening and therefore the fall-out from it is usually serious. For that reason, we believe true transparency is mandatory if your goal (as an accident management provider) is long-term contracts with fleets who value the benefit of knowing exactly what’s going on. Ethical business practice is the cornerstone of our organisation.

How transparent is your accident management service? Contact us for an evaluation.

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

Does Telematics Go Far Enough in Reducing Fleet Risk?

The use of vehicle-based technology to monitor and assess driver behaviour is a growing trend but does an investment in telematics stack up in a road risk context?

Here are some of the reasons why we believe fleets should proceed with caution.  

Cost 

One of the quoted benefits of some telematics solutions is that fleets can reduce their claim risk – and ultimately their insurance premiums - by installing gadgets that monitor (and report on) driving techniques - BUT The technology doesn’t come cheap and if savings don’t materialize, the return on investment will be negative.  

Digital dependency 

If a red LED starts flashing on the dashboard to alert a driver to poor technique the chances are that he or she will drive more carefully. If the telematics aren’t there, the driver will revert back to their old ways. Bad drivers don’t need an alarm bell, they need to change their driving culture.

The only way to achieve sustained long-term improvement that will reduce accidents and risk is to establish the root cause of poor driving and tackle it head on. Flashing lights might act as a reminder to drive more smoothly but erratic drivers needs to understand why their behaviour is risky and how they can improve their awareness and skills.  

One size fits all 

As any fleet manager knows, all drivers are different. Telematics can be used to alert drivers to all sorts of poor behaviour on the roads but they adopt a blanket approach that covers a narrow range of issues.

Although the symptoms of bad driving may fall into the categories picked up by the technology, the causes will vary hugely from person to person. Driver training can be implemented throughout your fleet as a preventative measure but tailored training offers a one on one educational approach that gets to the heart of the problem, tackling  

Our Solution 

The cost of Telematics could be regarded as something of a “sledgehammer to crack a nut” (especially when used on drivers that don’t warrant the special attention) and should therefore only become the ‘weapon of choice’ in particular circumstances.

From a cost viewpoint, it makes more financial sense to tailor a risk program using a range of cost-effective tools to instill and maintain a better attitude towards driving safety.

Additionally, in contrast to a Telematics solution, a fleet would gain more value by introducing training tools that are specific to identified driving risks, which avoids the “blunderbuss” approach and reduces wasted time and resource.

At RVM we believe there is a place for Telematics in assisting the journey towards low risk and we also accept that both telematics and training can be costly. That’s why we do things differently.

Our range of risk assessment tools are designed to identify low, medium and high risk drivers quickly, accurately and cost-effectively and link electronically and concurrently with our tailored approach to training.

This approach is designed to target specific driver weaknesses and thereby ensure the risk reduction budget is used smartly by applying it only to those areas that will have the greatest benefit in reducing your driving risk. This may in some cases include telematics.  

Take the first step – identify your fleet’s weak spots. Call us on 0113 224 8888 to find out how or visit our website.

RVM Launches Carbon Neutral Fleet Scheme

Fleet management specialist RVM Fleet Services has launched a new initiative to help businesses reduce the environmental impact of their company vehicles.

The new carbon offset programme will measure the carbon footprint of a fleet and purchase verified carbon units to offset emissions.

The scheme will be a standard feature of the firm’s entire portfolio of accident and risk management services.

Managing Director of RVM, Diana Rose, said: “The new scheme will be an integral part of our service enabling RVM clients to run their fleets in a responsible carbon-friendly way without the need for additional investment.

“We recognise that running a fleet is very often our clients’ most polluting activity and as our continuing contribution and tangible commitment to the green debate, we are delighted to be able to offer this contribution. 

“Having pioneered other unique market initiatives, we are demonstrating once again that RVM is a customer-focused, innovative and environmentally responsible business that solves current-day issues for its clients.”

The scheme had been developed in conjunction with a carbon sourcing organisation that guarantees high quality, certified and traceable carbon credits from forestry products in the developing world. The credits will be certified by internationally recognised standards such as the ‘Verified Carbon Standard’ (VCS) and the ‘Climate, Community and Biodiversity’ (CCB) standard.

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