Fleet News

Self-insurance: are you equipped to handle it?

FOR many fleets, self insurance can prove to be a sound financial investment. However, it can often seem a huge step involving considerable risk, as potentially huge bills could suddenly land on the firm’s doorstep.

Alan Hodgkinson, chief executive at repair network ABS Accident Solutions, has seen many of the concerns fleets have when taking this step and reckons that claims prediction and repair logistics are the worries that come up most.

He said: ‘We talk to a lot of fleets who are interested in either adopting third party only cover or by effectively being self-insured through utilising a large excess on their own vehicle damage. They consistently raise these objections – that they don’t really know enough about their own claims history to make credible predictions about their likely future claims, and they don’t know how to manage repair processes that would have previously been handled by an insurer.

‘Either of these points is enough to make the fleet drop the idea of self-insurance, so during the last couple of years, we have been working hard to arrive at solutions which overcome these problems.’

Hodgkinson said that fleets moving to self-insurance also tended to demand high levels of management information to check on the efficiency of the repair process.

Firms such as ABS can offer comprehensive risk modelling software which provides the fleet with a cost-effective, fast and accurate means of examining claims history and likely future claims.

Hodgkinson added: ‘One of the big mental steps to overcome for those going down the self-insurance route is the fear of ‘what happens if we have a bad first year with a lot of claims?’. With software, you can easily build a model that shows the likely outcome of adopting a greater degree of self-insurance over a period of several years.’

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