How fleets can defeat insurance premium inflation
Fleet insurance costs are rising because the cost of vehicle repairs is affected by the lack of new vehicles, semiconductor shortages and the current complexity of vehicle designs. Never before has the market seen such a range of drivelines, models and high-tech innovation, all of which make the repair and replacement market more complex and prices far more volatile.
Furthermore, motor insurance pricing has risen by 6.3% in Q1 2022, following recent FCA rules changes which have stopped insurers offering lower prices to new customers than to existing customers. Although the rules themselves apply to consumer insurance, it is likely to have a secondary effect on other parts of the vehicle market.
How can fleets combat premium inflation?
There are several ways in which fleets can keep their insurance premiums under control – but they essentially all come down to one core thing: the proper management of drivers. A fleet’s insurance premium is typically calculated based on historical claims. The most expensive claims – and those most feared by insurers – are personal injury claims.
Fleets can demonstrate that they manage their road risk by training drivers in how to behave appropriately around vulnerable road users and to avoid risky behaviours such as harsh braking, harsh acceleration, fast cornering, and close following.
However, occasional training sessions are not nearly as effective in lowering incident levels as continuous driver coaching – and insurers know this.
Using a system like SmartDrive’s video-based safety programme helps fleets to identify all the risky behaviours present in their fleet and to eliminate them. The system provides unquestionable evidence in the form of instantly uploaded and risk-analysed footage, along with vehicle data including GPS coordinates, speed, revs and braking. Most importantly, the footage is available to the fleet manager with actionable insights for driver coaching attached, and an easy audit trail to prove that the behaviour was identified and proactively coached in an objective and programmatic way.
Most fleets achieve a rapid return on their investment simply through having irrefutable evidence to dispense with no-fault and fraudulent incidents. However, SmartDrive helps fleets to drive their actual risk liability much lower than ever before. By eliminating the driving behaviours most likely to contribute to a collision, fleets can drastically reduce their incidences of near miss and collision.
Other benefits of video-enabled driver coaching
Actually knowing how drivers perform on the road and around other road users is an essential component of lowering insurance premiums. This is for two reasons: SmartDrive’s video footage gives fleet managers a complete narrative of events, which other systems, such as telematics, cannot provide. It also reveals behaviours which otherwise would go unwitnessed and therefore unmanaged – mobile phone use being a key example.
Secondly, the driving coaching insights SmartDrive provides to client fleets make personal injury claims far less likely, provided fleet managers follow through on debriefing drivers.
However, there are other benefits which will affect insurance premiums. Fleets can also drive down incidental damage. By reducing minor damage claims, they can afford to raise their excess levels without incurring higher costs.
They will also, of course, save money on repairs, and penalties on lease or rental damage.
There are many other benefits to introducing a safety system, including fuel reductions, reputational protection and lower unscheduled downtime.
However, the improved relationship with their insurer and the strong business case presented for lower road risk will be a powerful tool to negotiate better insurance premiums – and that is worth investing in.
Want to learn more? There are many great resources on the SmartDrive website including our guide to managing van fleet insurance.
- Posted by Shannon McNamara
- On August 31, 2022