Did you know that insurance premium inflation rises every year by more or less 8%. This is according to StatsSA who outlined the various price effects the insurance industry faces. For motorists and home owners, this is bad enough. But for fleet owners, it’s a massive spike that’s invariably going to affect your prices and competitiveness.
Much of this has to do with your risk profile. And yet, fleet owners ignore the everyday risks their fleets face, thinking, “That’s just the way the job goes.”
The team at Cartrack begs to differ.
Risk profiles can be lowered. A lower risk profile trickles down to your whole business; improving driver retention, increasing your ESG score, and ultimately benefitting your bottom line. Let’s find out how fleet risk profiles are lowered by expert fleet owners and how you can follow suit.
The quickest way to lower your fleet’s risk profile is to cultivate safety as a major priority. Not many fleets do this to its full extent, opening themselves up to all kinds of incidents, insurance claims, and reputational damage. The result is a perception of high risk, which translates to a high risk profile with insurance companies.
But before we look at how you can remedy this high risk perception, let’s explore the mind of an everyday insurance broker to see what influences their perception of your fleet.
In the mind of insurance evaluators, the factors that contribute to a high-risk business profile include a history of road incidents (accidents), high-value vehicles or cargo, and a lack of road safety measures. All of these can be remedied through better monitoring of what goes on when your drivers are on the road.
It may sound like an insurmountable problem to overcome, but it’s actually easier than you think. But remember that this perception can’t be changed overnight. Consistency in safer practices plays a major role.
This is what you should ask yourself about the fleet you run right now.
Evaluating your fleet’s accident history will give you some indication of how insurers look at your business from a risk perspective. Fleets of different kinds obviously have a number of road incidents that’s relative to their:
QUICK NOTE: There’s not much you can do about the first 3, but you CAN work on your fleet’s operational habits to counter a high risk profile.
The larger your fleet, the more incidents are bound to happen. But this is relative. A fleet of 10 vehicles that experiences 2 incidents per month will have a higher risk profile than a fleet of 50 vehicles that experiences 5 incidents per month.
It’s not about the number of incidents themselves, it’s about the average number of incidents relative to the number of vehicles.
DO THIS NOW: Make a note of how many road incidents (accidents, thefts, hijackings, cargo tampering, fuel syphoning, etc.) your fleet has had over the past 12 months. Then work out an average according to how many vehicles you manage.
Insurance companies aren’t ONLY worried about your vehicles. They also understand that cargo plays a big role in your risk profile.
QUICK NOTE: Cargo safety management plays an integral part in your fleet insurance premium negotiations; so don’t underestimate its importance.
How many times have you had to claim from your insurance for cargo related incidents? What was the nature of these incidents, and which ones happened most often? Is it possible your staff are not properly trained on how to keep your cargo safe?
DO THIS NOW: Make a note of the type of cargo you transport, what the risks are, and what you’re already doing to mitigate these risks. Also record how many times your cargo has been an issue within the past 12 months.
Your drivers play one of the biggest parts in your company’s risk profile. It’s worth investing your time as a fleet owner into a deeper focus on them; and there are various ways of doing this:
QUICK NOTE: Monitoring your drivers doesn’t have to be an “us-versus-them” scenario. Most drivers appreciate constructive feedback and your efforts in keeping them safer on the road.
If you think your insurance provider isn’t looking at your drivers, think again. They evaluate fleet safety and risk profiles based on many factors, and drivers is one that’s high on the list.
DO THIS NOW: Make a note of how many road incidents in the past 12 months have involved one of your drivers; whether it’s driver error, negligence or dangerous driving. Also note how many of these incidents can be attributed to one or two specific members of your team.
What you’ve just done by going through these 3 simple exercises is collect valuable data that speaks to your risk profile. Bring it all together and evaluate your own risk profile.
If you were an insurance provider, how would you feel about underwriting your business?
Answer honestly. And the next time you speak to your insurance providers, let them know that you’ve done your homework.
But also show them what measures you’ve put in place (if any) to lower these risks. What are some of these measures?
Keep reading…
Call a meeting with your drivers and inform them that their safety is your biggest concern. Explain to them how real-time vehicle monitoring, AI fleet dashcams and vehicle tracking can improve their safety—and the safety of the vehicles they drive.
Let Cartrack kit your vehicles out with panic buttons, cargo door sensors, collision detectors and other fleet alert systems that keep you informed of what’s going on when your drivers are out on the road.
Track your vehicles and high-value equipment with GPS & CPRF (Cartrack Proprietary Radio Frequency) solutions so that you always know where each vehicle is.
Let your insurance company know that Cartrack’s vehicle recovery service is a reliable, fast and historically-successful security measure that’s added to these tracking methods.
Use the data derived from your driver monitoring to coach your drivers based on their individual strengths & weaknesses. Teach them the value of safe habits, and let them know that dangerous road behaviour will be noticed and dealt with.
Your insurance premiums are going to go up due to annual inflation; there’s nothing we can do about that. The question is, “By how much?”
Putting safety systems in place gives you more negotiating power with your underwriters, proving to them that you take safety seriously. By preventing incidents, you establish a better risk-reputation over time.
Fewer claims result in lower premiums—that much is obvious.
So speak to Cartrack today about putting these safety measures in place. You’ll not only save on excess payments, vehicle repairs, and new staff hires; you’ll also save on those monthly premiums that just keep going up every year.
With fleet insurance premiums increasing every year, what can you do to ensure that your fleet has a low risk profile to counteract inflation?
