David Bamber, group procurement manager at The Independent Group, admits that in 2008 the fleet was heading towards becoming uninsurable.
The claims ratio to premium was running at 276% and the company was paying out vast amounts of money.
Today it’s a different story.
Thanks to a radical overhaul of fleet policy the claims ratio has fallen dramatically (to 80% in 2009 and just under 50% last year).
What’s more, the company’s insurance premiums have reduced by more than £100 per vehicle.
Driver communication has been key to the success.
“It’s OK sending out a new driver handbook but it doesn’t guarantee the driver reads it or understands it,” Bamber says. “So when we introduced new policies and a new driver handbook we held meetings up and down the country with every single driver.”
The company has adopted a carrot-and-stick approach with drivers.
Every time a driver has an at-fault accident they pay £100 and the money is used to fund a driver of the year competition.
If a driver has a second at-fault accident in the space of 12 months they go on a driver training course tailored to their needs.
Unusually, rather than the company paying for the training the drivers themselves pay. The course costs approximately £200.
Fleet News: How did you get drivers to pay for their own training?
David Bamber: We said to the drivers “we’re not here to make money or cause anyone financial hardship. We’re here to create better drivers”.
If the driver has a number of at-fault accidents then we firmly believe the driver is doing something incorrectly out on the road and our idea is to correct it.
Since the policy has been in place we’ve only ever had one person that’s done the training. We’ve found that as soon as you start putting financial policies in front of people they think twice about their responsibilities when they climb into the company vehicle.
FN: Tell us about your driver of the year competition.
DB: There are a number of different requirements drivers have to meet to qualify for the ‘driver of the year’ competition. Any driver who fails to complete a business mileage return on time is eliminated from the competition, for instance. We also take into account motoring offences.
The remaining drivers then complete an online risk assessment which tests their responses to certain situations on the road. The top five scorers go on to compete in a driving day.
Last year, the winner was awarded £500 and the use of a high-spec BMW for a week.
FN: How have you tackled rising fuel costs?
DB: We have a target of 90% of fill-ups being at supermarkets. Taken in isolation Independent Inspections has actually exceeded that. In the last report 93% of the fuel spend for the month was at supermarkets.
The report goes out to the board on a monthly basis.
It’s a rolling report for a 12-month period with a month-by-month breakdown of the number of litres uses, how much the litres cost and where the spend has taken place.
There’s no point having a supermarket policy if you don’t report on it and people who are not following the policy go unchallenged.
We have also saved fuel by having speed limiters fitted to all our commercial vehicles. We did a trial before we decided to roll it out to the fleet. We had six vehicles with limiters fitted and compared them to six without over a certain period.
There was an 11% improvement in mpg on the vehicles fitted with speed limiters versus the ones that weren’t. It’s difficult to judge the exact savings, though, because you might have a driver with a heavy right foot or a driver that carries more equipment than someone else on another job.
FN: You’ve removed maintenance from your contract hire agreement – should other fleet managers consider doing that?
DB: I’m quite fortunate because I’ve worked as a supplier to the industry with commercial vehicles and cars and I’ve worked on the fleet management side.
My experience was that contract hire companies always build in a margin of error when they are working out maintenance and it’s always in their favour.
We made the decision to self-maintain the vehicles on both a cost saving and an improved cash flow basis. We introduced a third-party SMR provider to take control of all day-to-day and driver issues and we fully manage their activities.
The results have been very encouraging, with an average monthly cost per vehicle (combined lease and SMR costs) now reduced by £120.
FN: What made you switch from the supplier side to fleet management?
DB: Sometimes in your career you do look for a change. At the time I was working for Evans Halshaw, which is now Pendragon, supplying vehicles to fleets, and a very good customer of mine asked me if I’d be prepared to manage his fleet, which was then 56 vehicles. The next thing I knew I had a desk at his place and that was 13 years ago.
Bamber’s next task in his new role as group procurement manager (he was previously fleet and procurement manager and, prior to that, group fleet manager at Independent Group) will be going out to tender for fleet suppliers, while his colleague Rebecca Bolton manages the day-to-day running of the fleet.
“We’ll also be working on maintaining the new policies,” he says. “We’re confident they are the right policies. They have given us the results we wanted and now it’s time to build on those policies.”
The Independent Group profile
The Independent Group is made up of three insurance claims handling businesses: Independent Inspections, Ansa and the recently acquired Chem-Dry.
“There’s a natural synergy,” Bamber says. “Independent Inspections is an evaluation and replacement service to the insurance industry specialising in flooring and furniture. They evaluate a carpet and if the damage is on a large scale, Chem-dry get involved. Ansa specialises in drainage.”