Telematics have been used by fleet managers for some years now, though their primary reason for using them wasn’t in order to get a cheap fleet insurance quote. However, with the recent changes to the Ogden rate, uncertainty over Brexit and the host of other factors that have been forcing fleet cover costs up, insurers and fleet managers have been investigating how telematics can be used to reduce insurance premiums as well as other costs. Masternaut’s recent study of over 10,000 commercial vehicles found that across fleets could save £55 per vehicle on their insurance, fuel and asset costs by using these systems. In this latest blog from Coversure Hull, we’ll look at how the role of telematic systems is changing and how they could hold the key to reducing your fleet insurance premiums and other essential fleet costs.
Telematics, in-car devices that digitally track a vehicle’s movements, have traditionally been used by fleets to cut fuel costs, boost efficiency and aid vehicle recovery in the event of theft. What’s been less well-known – and certainly less exploited – is their influence on the frequency and severity of accidents. This ‘material reduction’ in accidents can really help drive down the cost of fleet polices. One of the reasons for this is that when drivers know they have a telematic system on-board they tend to drive more slowly and more cautiously. Given that around 65% of fleet insurance claims in this country have fault accepted, this is exposing the insurer to escalating non-fault claims against their book and anything that can reduce that claim rate has to be good news. The RAC Foundation’s 2016 report found that fleets with telematics systems had 43% fewer collisions. The impact of such a reduction on a business is significant; not just in terms of insurance costs, but also in terms of repairs and having staff of work through injury. And when it comes to making a claim there is nothing like having empirical data to support the apportioning of blame, something that telematics make easy.
Until recently, insurers haven’t taken the benefits such systems as seriously as they might have. Some have paid lip-service to them when it comes to calculating fleet premiums, but its only comparatively recently that they’ve begun using the data they provide as part of their calculations. With the fleet insurance sector facing unprecedented challenges it seems only logical that telematics ability to influence (and cut) fleet insurance costs will only increase. To reap the full benefits, however, fleet managers need to work with their insurance broker to deploy the data that’s been provided to build a better case for better fleet premiums.
If you ask most businesses why they installed a telematics system in the first place, then this is likely to be the reason. The RAC Foundation report stated that 55% of fleets cite reducing fuel costs as one of the things they wanted to achieve through their usage. Industry statistics show that telematics can improve fuel efficiency by around 10%. It can achieve this by reducing idling, mapping out more efficient routes and working with engine management systems. Given the costs of fuel are on the rise once more, saving 10% on fuel is a saving that’s hard to ignore.
Ensuring your drivers are working efficiently is essential if your fleet is to pay its way and telematics can play a huge part in this. From route planning and avoiding delays on the road to optimising a vehicle’s performance, there are a number of ways that in-car systems can boost efficiency. Be able to know where your drivers are being another massive benefit. Knowing that their whereabouts are being tracked should ensure that spend their time doing what you’re paying them to do.
Telematically assisted drivers make for better drivers and this has benefits beyond reducing fleet insurance costs, it can also reduce wear and tear. Slower, safer driving, less late, harsh braking can reduce wear on tyres, brakes and clutches and so reduce the cost of repairs and boost efficiency and productivity by not having vehicles off the road.
Telematics can have a major impact on a fleet’s safety which in-turn can cut everything from fleet insurance quotes to the amount of time a vehicle is off the road. As we have said drivers with telematics systems on-board tend to drive more cautiously. Andrew Page runs a fleet of 900 vehicles and the Financial Times reported that since they installed telematics they have seen a 97% drop in speeding and a 46% reduction in crashes. Knowing they are being monitored by their employer’s means drivers don’t need to see a speed camera or police car to slow down.
Cutting Fleet Costs With Telematics
Telematics undoubtedly have a lot to offer fleets and it’s easy to see why they are finding wider adoption. Unlike when they first came on to the market around 15 years ago, these systems are now affordable for most businesses. As with any computer system though, the data is only valuable if used. With insurance companies taking a greater interest in them, and with the associated potential reduction in insurance costs, they have to be another weapon in a fleet manager’s cost-cutting armoury.
Like Some More Help?
Well we hope that’s given you some food for thought. If you’d like to know more about saving money on your fleet costs, or would like some help getting the fleet insurance cover that’s right for you, then please contact us. You can call us free on 0800 977 6037, email us by clicking here or get a no-obligation insurance quote here.
Coversure Hull is an independent fleet and business insurance specialist. From our base on the banks of The Humber, we offer comprehensive commercial vehicle cover, with particular focus on fleet and special types, alongside other essential business covers, namely commercial combined and liability.
Since opening in 2005, our combination of superb service and outstanding value for money business policies have established us as the insurer of choice for organisations both large and small.
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We have made it our business to protect your business. Whether you need fleet, landlord, liability or commercial combined insurance, we can offer you high quality cover from some of the UK’s leading insurers, all at highly competitive premiums that’s backed by our outstanding cover-to-claim service.
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For a friendly independent service and great value cover, contact Coversure Hull today. You can call us on Hull (01482) 434343, for free on 0800 977 6037 or you can email us by clicking here.
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