Peter Ashdown-Barr, Founder, Director, InterResolve
Against the backdrop of the ongoing referral fee debate and the wider industry enquiry into the rising cost of motor insurance, 2012 is primed to be a turbulent year for the busy fleet manager. With issues surrounding accident claims, risk prevention, insurance ratings, referral fees and strategies for reducing loss ratios, many will be looking at claims exposures with increased intensity.
Throughout all of this however, the objectives remain the same; reducing the number of claims and associated costs against your fleet. I predict there will be an increasing number of opportunities to achieve these objectives as the number of solutions to these problems emerging in the market continue to grow throughout the year.
Pro-activity in claims costs reduction for fleets
The cost of third party injury and hire claims continues to be a focal concern for fleets and we are increasingly being consulted on the methods available to reduce the impact this has on fleet loss ratios.
An emerging trend in response to rising costs, and one that is increasingly gathering momentum, is pro-active intervention into fault claims reported to fleet managers. The general principle is that by reaching the non-fault claimant first and managing the claim quickly will benefit both parties and will reduce legal and credit hire costs. Unfortunately there have been many reported instances of some accident management companies using this practice to generate referral fees for themselves rather than reduce costs, which is a short-sighted measure of no help to the fleet and resulting only in profitable revenue streams for the accident management companies concerned.
Information gathered through active intervention, however, can be used to actively manage and settle the claim against the fleet cost effectively, resulting in substantial and sustainable benefits to fleets, not least in terms of reducing fleet claims costs and loss ratios. Pro-activeness in this area can provide valuable control over claims that otherwise would be difficult to attain. This system is already being executed effectively in some quarters, with the availability of non-credit hire solutions and mediation for injury claims leading to claims costs being reduced in both those areas by over 50 per cent: a prize well worth achieving, especially in difficult economic times.
Even despite this, early notification remains the key to reducing costs and traditionally this has been an issue in fault claims reporting into fleets. The slower the reporting however, the less chance there is of reaching and assisting the non-fault party. If telematics technology can be put to use to provide early notification of incidents that are likely to lead to claims, this could provide a very viable auxiliary solution.
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