For many companies, the insurance bill after an accident is always a nightmare because it is always a surprise

“Once a fleet operator has questioned where the risk is, they can start managing it”

Every crash, however small, involves significant administration and, with the continual focus on keeping fleet costs under control, accident management companies are providing a double-edged benefit to fleet operators. Accident management companies (the service is also available from many contract hire and leasing and fleet management providers) have the expertise to manage vehicle repair and liaise with third parties and insurers.

While accident management is not a new fleet service, providers see the ever-increasing focus on at-working driving health and safety and duty of care as a major opportunity to help fleets to reduce the risk exposure of their drivers. Managing the risk faced by drivers begins with compiling the fleet policy, according to Mike Waters, head of market analysis at Arval, which has more than 80,000 vehicles on its accident management programme. He says: “Accident management should be part of a company’s overall fleet policy. The type of fleet policy operated helps define the risk element and fleet operators should then look at the best way to manage the policy, which is often the hardest part for many companies – the starting point.”

Straightforward core questions that need to be answered to help determine the risk include:

• The type of vehicles operated?
• What are they used for?
• Who is driving them?
• Typical mileages being clocked up?
• Where are the vehicles being driven?
• What are the vehicles being used for?

Mr Waters says: “The operational characteristics of the fleet have a big impact on the element of risk associated with the fleet operation. There is a big difference between the amount of risk associated with a 90% perk driver clocking up 5,000 business miles a year and a 90% job-need company car clocking up 30,000 miles a year.

“However, it is about getting the basics right and, once a fleet operator has questioned where the risk is, they can start managing it.” That begins with answering the question “What exactly is an accident?” Mr Waters explains: “If the definition of an accident is a collision between two or more vehicles, then a lot of incidents will not be recorded. That will have a big impact on the economics of the overall fleet operation as numerous small incidents will continue to go unchecked and, therefore, unrecorded.”

That, in turn, will have a significant financial impact on the fleet, either through lower than expected residual values when a damaged car is sold if the fleet is outright purchased or, for leased vehicles, contract hire companies will levy so-called fair wear and tear charges. Mr Waters says: “An ‘accident’ is anything that is outside a minor dent or scratch on a door in a car park. It is almost any damage to a vehicle that can be repaired.”

Dave Abbott, director of RAC Risk Management, says every single incident that costs money should be counted because the knock-on effect remains huge, irrespective of how much can be reclaimed either from an insurance company or through a third party. Mr Waters says: “It is a good discipline to encourage drivers to report all accident damage. It is not only important from a financial perspective, but also from a driver motivation aspect. Drivers frequently don’t like driving company cars that are scruffy, and the more damaged they are the less careful drivers are with them. If there is a climate of care in a business then company car drivers are likely to be more careful and look after what is an expensive company asset.”

As a result of surveys conducted on behalf of insurance companies into fleets’ risk exposure, Mr Abbott says: “90% of fleets have basically no knowledge of their responsibilities and liabilities and almost all company directors are totally unaware of the actual level of the cost of accidents within their business. “They don’t know how much accidents costs because they don’t keep any records and the insurance bill is then always a nightmare because it is always a surprise.”

Tim Rankin, managing director of Ipswich-based WNS Assistance, an insurance claims management specialist that handles 250,000 motor claims a year on behalf of insurers, brokers, and large commercial fleets, insists that: “Information is power. The problem with some fleets is that they have little or no data on their drivers, don’t know how capable they are on the road or how often they are involved in an accident. “Any company wishing to protect itself, its drivers, and the public at large from what may prove to be lethal company cars needs to arm itself with the management information that is only available through detailed analysis of claims experience.

“Companies that operate a regular, efficient driver-training programme could make significant savings in the longer term”

“Only then will it be in an informed position to take the preventative measures that will provide real testimony to its duty of care, and significantly reduce its fleet costs at the same time. It’s not often that meeting government policies actually saves a company money. But it will in this case.” Reports from accident management providers to fleets detail their incident record and from that robust risk management policies relevant to individual drivers or a group of drivers can be put in place that will reduce insurance claims. Trevor Cutts, managing director of Brighton-based Elite Incident Management, says: “Our web-based management reports not only enable fleets to track claims and their vehicles throughout the repair process, but also highlight areas of risk that should be targeted to improve accident records and the safety of their drivers and other road users.” Accident data collected by Elite Incident Management reveals that parking incidents currently rate as the most prevalent claims in the UK from fleet drivers. Mr Cutts says: “It is, therefore, clear that many company car and van drivers need to improve their manoeuvring skills – both in the car park and at the roadside.

“Companies that operate a regular, efficient driver-training programme could make significant savings in the longer term. With a vast number of accidents occurring in car parks and while parking, parking sensors on each company vehicle may also prove to be an extremely useful investment and many new vehicle manufacturers are installing them as part of a standard package.” Mr Waters adds: “For 99% of companies blanket driver training will not be the right answer. However, drivers who have a number of rear-end shunts because they are driving too close to the vehicle in front or have a number of accidents as a result of reversing into car parking spaces can undergo bespoke training.

“Similarly, drivers who may be aggressive on the road and do not have the right attitude behind the wheel of their company car may undergo some classroom training.” It is also important, say experts, that the recording and analysis of accidents and training for staff is ongoing. Mr Waters says: “Checks on vehicles should be carried out perhaps quarterly as part of an appraisal with a line manager. It is important to develop a culture of safety within all businesses.” For repeat offenders who are frequently involved in at-fault accidents, penalties could be introduced which, once driver-training has been exhausted, may extend to financial penalties or suspension of the benefit.

Mr Cutts concludes: “Industry figures suggest that the ultimate cost of an accident claim is 300%–500% the value of the vehicle repair, once visible costs such as replacement car hire and invisible costs such as the non-delivery of goods and the rescheduling of business meetings are taken into account. “Elite Incident Management takes a proactive approach to helping fleets drive down costs. We have in place partnerships with risk management and driver-training providers and, having analysed clients’ accident data, we can devise solutions to reduce their accident bills.” While accident management is ultimately about control and minimising the cost of crashes to businesses, data collected plays a crucial role in helping fleets to focus on the solutions required to reduce the occupational road risk posed by their drivers.