Insurance Costs

Too many fleets switch insurance companies or brokers on an annual basis in pursuit of saving a few pounds per vehicle.

In reality, they would be better off financially and administratively in terms of saving time by building a long-term partnership with their chosen provider.

That’s the view of Nick Kennedy, managing director of the Peterborough branch of Henderson Insurance Brokers, who says: “The fleet that buys on price is not getting a good long-term deal.

“Many fleet managers tend to re-broke at every renewal date, inviting in a handful of brokers to pitch for the same business with the same insurers.

“Very often this process can be counter-productive as busy underwriters are often ‘turned off’ by a risk that is seen year after year by more than one broker as they feel they will have little prospect of success in picking up the business.

“That scenario often results in a ‘not competitive’ quote as the broker would rather spend their time looking at business they think they will win.

“A fleet that has had three different insurers in a three-year period is often viewed dimly.”
Kennedy believes a more selective approach is usually beneficial. He recommends that if a fleet manager wants to challenge their existing broker that they do not engage more than one other broker.

“Clearly, the fleet manager needs to ensure they’ve chosen the right broker and, when making that choice, that their prospective broker displays a clear understanding of the fleet market and has the appropriate markets available in terms of insurer agencies,” he says.

“Value for money is something a fleet manager should not have to worry about if they have a good relationship with a broker.

“When approaching renewal, the broker should operate transparently and provide feedback from the insurers approached so that the fleet manager is in an informed position.

“A long-term partnership also means that any peaks or troughs in claims experience should be smoothed out.”

Some brokers adopt a reactive approach to premium quotes and will simply obtain a claims experience 30 days prior to renewal without much forethought.

However, best practice is for a broker to monitor clients’ claims and ensure that any claims awaiting settlement – reserved claims – are kept to a minimum.

A robust occupational road risk management programme is proven to reduce road crashes and days lost to injury or work-related ill health, as well as vehicle downtime, wear and tear and improve fuel consumption.

A good broker can assist the fleet client with this and liaise and communicate the risk management programme to insurers with a view to obtaining better terms.

“A broker will give impartial advice and if you use the right broker they will have access to all the markets available directly and also other markets not available directly, such as Lloyds,” says Kennedy.

“A professional broker can then use their experience to present a risk in a better light with a view to obtaining better terms and capitalise on their relationships with insurers to obtain better terms than might be available directly to a fleet.

“Brokers should also adopt a proactive approach in claims handling and will challenge insurers and third parties thus protecting clients’ interests.”

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