Willis has developed an insurance scheme for employers who want to allow staff to drive their own cars on business - the so-called grey fleet.

The scheme will be underwritten by the Catlin Group and the cover can either be comprehensive or third party fire and theft.

The premium is collected on a pay-as-you-go basis from employees’ mileage expense claims.

The scheme uses HM Revenue and Customs’ tax-free Approved Mileage Allowance Payments (AMAP) as its premium basis. The AMAP rate for the first 10,000 business miles increased from 40p to 45p per mile on April 6.

The grey fleet insurance premium can then effectively be funded from within the additional 5p per mile paid by employers to own car users. For comprehensive cover the premium rate quoted for one potential customer is 4.1p per mile and for third party fire and theft cover it is 3.3p per mile.

Catlin requires a monthly mileage declaration as part of its administration process.

Steve Hall, development director in Willis' Bristol office, said: “We believe the scheme is unique and overcomes all the administration issues associated with employers checking whether or not staff have the correct insurance in place on their own cars to drive them on business journeys.”

“What it means in financial terms is that if insured on a comprehensive policy, employees will receive 40.9p per mile with the remaining 4.1p per mile deducted by the employer to pay for the cost of insurance.”

The global broker developed the scheme following an approach from Fleet Support Group, the UK’s largest independent fleet management company with 55,000 vehicles on its books.

The scheme is designed to be used in tandem with FSG’s Risk Master at-work driving safety initiative for employers.