Over the past few years, the UK’s motor industry has faced numerous challenges. Here, we outline what they are and explain how these circumstances may affect your commercial fleet.
Let us start with just some of the key issues that have recently impacted the motor industry:
- National lockdowns led to fewer drivers being on the road and had the knock-on effect of fewer vehicles being purchased
- A global shortage of semiconductor chips, again due to global lockdowns, led to huge production delays on new vehicle orders, and repairs
- Vehicle parts being on back order for similar reasons has also caused vehicle repairs to take longer and cost more
- Significant increases in the cost of energy, fuel and parts due to the wider impact of inflation
How are these factors affecting UK motorists?
Timescales – the upshot is that, unfortunately, motorists will now have to consider that everything, from their new vehicle being delivered to their current one being repaired, could take a little longer than what we were used to pre-Covid, due to the ongoing delays and cost increases listed above.
In a previous blog, we discuss these challenges in detail and explain how they are impacting not only motor claims inflation but motorists and business in general. Learn how motor claims inflation and rate increases could affect you.
What does this mean for your commercial motor fleet insurance?
As you will already know, inflation is impacting everyone in one way or another, whether it be individuals or businesses, and insurers are no exception.
Insurers are seeing an increase in the cost of motor claims, at around 10%*, as Penny James, former Chief Executive at Direct Line, reported in 2022. As any other business would, insurers too have to make that cost up elsewhere, which is leading to premium rate increases for customers in order that they can continue to service and cover their clients.
Ultimately, insurance premiums are likely to continue to rise as the costs to insurers for repairs and replacement do too, meaning those looking for insurance need to prepare for an increase.
So what can be done to reduce your commercial motor fleet’s risk, and cost?
The key is instilling effective risk management into your company’s culture. The claims performance of your motor insurance can assist your broker with the negotiation of your renewal terms to keep any increases in premium to a minimum.
We suggest considering implementing some of the below measures, if you do not already, to help you manage your motor fleet risk.
Driver Selection and Training
Although we appreciate that the ongoing driver shortage in the transportation industry could be making it challenging to find qualified drivers for commercial fleets, by carefully considering the drivers you choose and providing them with effective training, you can improve your claims experience.
Ways of managing driver selection and training include:
- Including a driving assessment as part of your interview process
- Checking employee driving licences on a regular basis
- Conducting regular driver eyesight checks
- Providing additional driver training courses
Vehicle Maintenance and Cleaning
Regular maintenance is crucial to ensuring the safety and longevity of commercial fleet vehicles. Naturally, owners must ensure that all vehicles are properly maintained, inspected, and repaired when necessary.
Whilst ensuring your vehicles are roadworthy is a requirement, making vehicle maintenance a priority can encourage your drivers to take extra care whilst driving. Drivers often spend long periods of time in the vehicle so having one that is well-maintained and clean can promote better driving habits.
Enrolling a detailed Driver Handbook
A commercial fleet driver handbook is typically provided by the company that employs the drivers and provides them with important information such as driver safety, vehicle operation, maintenance procedures, and company policies. The handbook serves as a resource for drivers to understand the expectations of them and their job, and to ensure they operate safely and efficiently while on the road. It may also include information on national and government regulations that apply to commercial drivers. Naturally, by implementing guidance on better working practices, risk should be reduced.
Fleet Management Software
Fleet management software can help businesses and organisations manage their vehicle fleets more effectively and safely. The use of this type of technology can help not only reduce operating costs and increase efficiency in managing fleets but also improve safety and reduce risk. It can include features such as GPS tracking, real-time vehicle monitoring, route optimisation, maintenance scheduling, and driver behaviour analysis. Having software in place such as this can help you manage your fleet, routes, scheduling and maintenance more effectively.
Claims Reporting Procedure
As an insurance broker, we have seen the impact of not having a robust claim reporting procedure in place and we feel that this is key when it comes to risk management and keeping your insurance premiums down.
Whilst some think that if an incident isn’t reported, it may go away, more often than not, this isn’t the case. This way of thinking can cause the overall claim cost to become higher later down the line or, even worse, void due to late notification. We recommend that all incidents, that have the potential of turning into a claim, are reported to your insurance broker as soon as possible, even if you do not wish to claim for your damages.
To create an effective claim reporting procedure within your company, we recommend you look at the following areas:
- Create a culture where drivers can report accidents without hesitation or nervousness
- Provide drivers with information and training on what to do when they are involved in an accident, as well as the resources to record what has happened
- Conduct post-accident meetings with your drivers to obtain a completed accident report form and driver statement as quickly as you can after the event, and send these across to your broker, or in our case, your Claims Handler
Want to discuss your fleet insurance?
This may seem excessive as none of us ever plan on having to make a claim, but we hope that everything we have detailed above can help you not only mitigate some of your risk but also helps you to prepare for if you should you need to make a motor claim, and the provisions you may need to make.
To discuss any elements of your commercial motor fleet insurance, contact us on 01653 609151 or at commercial@mcclarroninsurance.com.
