29 July 2020

Optimising your fleet premium by taking a risk management approach


Fleet premiums can represent a significant expense for many companies. A number of minor yet frequent claims can increase your premium year on year, compounded by such issues as claims inflation and the effects of the recent Ogden legislation pushing up costs incurred by insurers. You could shop around for a better deal. But have you thought of taking a risk management approach as a means of reducing claims and lowering your yearly premium?
We’ve all heard of businesses putting measures in place to protect property from fire, flood, theft and other risks. But what areas would you need to consider to reduce your fleet’s exposure to risk? This four-part plan offers some suggestions, including a number of low-cost measures, such as safe driving reminders and common-sense advice that can be very effective:
1. Understand the risk
For a start, you need to understand the level of risk your fleet faces, which entails looking at the daily activities of your fleet vehicles. This includes the driving record and experience of your drivers, whether routes are standard or varied, the time of day driving is undertaken and what percentage of your employee’s day is spent driving.
2. Evaluate the risk
You then need to evaluate whether vehicles are suitable for the nature and type of driving carried out, whether you have ‘high risk’ drivers and journeys, and if current risk-treatment measures are proportionate to the risks undertaken.
3. Treat the risk
Having gained an understanding of your fleet, drivers and higher risk activities, you need to consider how to reduce levels of risk. This involves implementing measures, many cost low but are highly effective, including:
Driver information: company-related driving standards can be imparted via driver handbooks and other means, including how to deal with distractions, such as mobile phone use; ensuring your drivers implement best practice
Driver selection and assessment: assess an employee’s driving ability when they are recruited, via an online driver assessment tool or on-site driving assessor, highlighting high-risk drivers who may require additional training
Driver training: following assessment or an incident, implement online, classroom-based or one-to-one in-vehicle training. (Commercial drivers should complete CPC training and undertake 35 hours of training every five years.)
Telematics: provide data on such aspects as speeding, excessive braking and time spent braking. Data must be utilised to monitor performance and mitigate risk. Cameras provide a valuable tool in understanding the cause of an incident and driver behaviour, enabling insurers to access information readily and easily.
Journey planning: can alterations be made to regular routes to make the journey safer? Can you assist drivers with journey planning? Are there restrictions as to the amount of driving undertaken? Is an overnight stay applicable? Such information could be included in a driver handbook.
Vehicle maintenance and inspection: vehicles should be kept in good and safe condition, with up-to-date servicing and MOT, and regular vehicle inspections. A simple solution is to lease vehicles on a full maintenance basis, but if vehicles are returned below the condition expected, costs may be incurred.
4. Review the risk
Once you have set risk management measures in place, you need to regularly review their effectiveness, looking at how accidents are investigated and whether this leads to further risk reduction controls.
Managing fleet risks
Erskine Murray’s dedicated account executives can carry out an assessment of your fleet and give you further guidance on the steps you can take to optimally manage it. Through a risk management approach and by having constructive dialogue and understanding your business, we will work with you to increase the chances of you having a sustainable fleet premium that is managed as well as possible. By managing fleet risks in this way, you will not only keep insurance costs under control, but also reduce end-of-lease costs and possibly reduce the risk of prosecution in the event of an accident.

To find out more, please call 0116 265 4300 or email [email protected]