Fleet risk management is more than just driver training and vehicle security, says Sharon Curd of Allianz Cornhill....
Fleet operators often don't realise that the hidden costs of an accident, such as failed deliveries and employee downtime, could be as much as five times the cost of the vehicle repair. This fact goes some way to explaining the need for a continued hardening of premiums. Add-on the escalating personal injury costs triggered by the use of the Ogden tables and the right of the NHS to claw back hospital fees from insurers, and the case for fleet risk management is clear.
In the past, fleet risk management focused on driver training and vehicle security. Now insurers are taking a wider view. Geoff Moylan, commercial motor manager, of Allianz Cornhill, is keen to point out that while driver training programmes and improved vehicle security are important, the real benefit of comprehensive risk management is the change it can exert on the day-to-day operation of the fleet. He says: "Every fleet is unique."
Allianz Cornhill's solution is a fleet risk management initiative that offers a package of benefits, including a free fleet evaluation and a refund of up to half the cost of risk improvements from its innovative Fleet Partnership Plus scheme. "Our Fleet Partnership Plus initiative is designed to encourage fleet operators to work with us," explains Mr Moylan. "Together, we can identify an effective programme that can really make a difference, such as suggesting an assessment of a driver's risk rating – particularly useful when recruiting new drivers."
A previous fleet risk management initiative launched by Allianz Cornhill generated a 19% reduction in accident frequency. "Our latest initiative will enable us to build on this success and help to make our roads safer."
Recent statistics show that 65% of company vehicles are involved in a road accident each year and it is estimated that between 500 and 1,000 people die in accidents involving vehicles being driven for work purposes.
"These statistics highlight the need for action which goes further than sending drivers on driver training courses. Other steps such as monitoring the out-of-hours-use of company vehicles and offering accident-free bonuses could make a significant contribution towards reducing accidents," suggests Moylan.
It's not just insurers that are calling for action to reduce road accidents. The government has set a target for the reduction of road casualties by 40% in the next 10 years and Allianz Cornhill is urging fleet operators to put in place a rigorous programme that will place the spotlight on safety. "Fleet operators and drivers can make a big contribution to road safety by adopting pro-active risk management to risks connected with 'at work' vehicle use." observes Mr Moylan.
Allianz Cornhill cites health and safety as the core component of a successful risk management system. Experience shows that companies taking action to promote the safety of their staff while driving can benefit in a number of ways by:
"Employers have a moral as well as a legal responsibility to take measures to ensure a safe working environment for their drivers," explains Moylan.
Many companies in the UK have adopted "Target Zero" as their goal for health and safety performance and as a motivator for staff. Allianz Cornhill is keen to endorse this ethos by encouraging fleet operators to work with an expert risk management provider such as Fleet Interventions which, as part of a fleet consultancy service, offers a health and safety assessment as an integral part of their overall package.
Increasingly, companies not yet embracing the "Target Zero" philosophy will be forced to do so by a number of growing external factors. Issues likely to become influential include:
"Fleet managers need to assess the sociological, political, legal and economic forces that are likely to impact on the way they operate and develop a culture that can respond," adds Moylan. "This means creating a meaningful dialogue between the fleet manager, the drivers, the MD of the business and insurer that leads to a risk management programme that not only focuses on the client's needs but is flexible enough to respond to changing attitudes and expectations in the future."
The management culture of fleets is already becoming a hot topic with insurers unable to rely on premium movement alone to act as a catalyst for risk improvement. Persuading bosses to take seriously the long-term benefits of fleet risk management is still difficult in some cases where the cost of risk improvements could add up to many thousands of pounds. "When we encounter this attitude, we explain the threat of future claims inflation so they can understand how effectively their risk management systems might safeguard them in the years ahead," says Moylan. "This usually changes their mind, especially when we go on to explain simple risk management techniques that they can undertake themselves for very little outlay."
Allianz Cornhill has produced a fleet risk management pack promoting the benefits of pro-active risk management. The pack contains a comprehensive guide to effective vehicle risk management, a driver's handbook, a fleet evaluation questionnaire and information from a range of risk management experts offering services that qualify for a refund under the Fleet Partnership Plus scheme. The pack is available free to policyholders and is designed for large and small fleets.
Information in the pack includes:
"We've put together a pack that enables a fleet manager to understand issues arising from the operation of a motor fleet," says Moylan. "Operators have different motives in applying risk management procedures. Our fleet management initiative aims to meet them all."