Insurance insights
When it comes to improving efficiency and trying to reduce costs, insurance might not be the first thing that fleets think of investigating. But Peter Smits believes that there are savings to be made
For many drivers, insurance is generally a difficult sell – and even more of a challenge to get enthusiastic about. The one area where there does seem to be the slightest hint of satisfaction is when making a saving on a premium, whether through shopping around for a new deal, or the existing broker’s renewal coming in at less than expected.
I understand the desire for fleets to reduce their insurance costs, particularly during the current economic climate, where profit budgets for pretty much everything are being cut and running vehicles is not getting cheaper anytime soon. I also know that a cheaper premium can often prove too hard to resist – after all, one policy is just the same as any other and none of us ever plan to have any claims, correct?
Well, no, it’s not really correct. The trouble with that assumption is that a cheap premium will often result in a cheap service and/or onerous terms and conditions that are not always immediately apparent.
Don’t get me wrong, I’m not advocating that fleets and drivers should over-pay for their insurance and I also understand that a competitive solution should be the outcome. In order to make that happen, there are some best practice pointers that will help guarantee the best and most competitive package, year on year.
“I understand the desire for fleets to reduce their insurance costs, particularly during the current economic climate, where profit budgets for pretty much everything are being cut and running vehicles is not getting cheaper anytime soon”
Smits’ tips
Select a broker that is truly independent – that means one that is free to search the whole market. Make them agree to a thorough market analysis and place all your trust in a single point of contact.
When arranging insurance, brokers should be your advocate, who can ‘sell’ the risk to underwriters to get them to compete for your business, which makes for the most competitive premium.
Approaching multiple brokers at renewal could result in the same risk being presented to the same insurer from different sources. In our experience this can result in some insurers refusing to quote, reducing the panel, and therefore increasing the premium.
Underwriters want reassurances that any work they do could result in securing the business.
Don’t be too keen to jump ship from insurer to insurer – continuity can help secure long-term savings. Just make sure your broker always gives the holding insurer the chance to match any better rate.
Like multiple presentations, most insurers won’t quote or provide their best rate if they can see three different insurers on cover in the past three years.
Be demanding of your broker. With a large fleet, they should be providing you with a quarterly update on claims and incidents, helping you identify any patterns for vehicles or drivers that you can act upon immediately, rather than getting a nasty surprise a week or two before renewal.
Think about paying for small claims and glass damage yourself. The frequency of claims rather than the value of claims is what can turn an underwriter off pricing any risk. Also, it is often said that one large claim can be written off as an exception however, frequent low-value claims can dictate a lack of care and attention.
Finally, don’t be averse to engaging a broker; insurers reserve their best rates for brokers who can demonstrate good knowledge and longevity with the client. Fleet business can be labour-intensive and not many insurers would write this directly with the client.
Peter Smits
Managing director, Ashbourne Insurance
