PERSONAL VIEW |
INSURANCE |
 Michael Harvey |
One of the biggest spends a fleet manager has under their control is fleet insurance. Conventionally a fleet manager will turn, a couple of months before the time of renewal, to their trusted insurance broker to go to the market to procure the best deal possible. However, the world of insurance broking can be shrouded in mystery.
Brokers can talk about hard and soft markets; captives; reinsurance provisions; and retro-rated deals. Sometimes one is left thinking, “Did I get the best deal available?” The fleet manager’s uncertainty is mirrored by our own personal experience of buying motor insurance through a broker, where year after year the broker tends to favour one or two specific insurers. Could this potentially be because they earn a higher referral fee or commission from those chosen insurers? Also, have brokers drifted into a comfort zone where all they are interested in is protecting their income and renewing the insurance rather than broking the best deal?
In fact, some fleets have good claims records, which don’t seem to benefit from a reduction in annual insurance premiums. Are we living in a world where a broker does not broke unless pushed hard by their client? Also, is conventional insurance the right answer anyway for fleets? When was the last time your broker mentioned the possibility of a higher proportion of self-insurance? For most fleets when one really looks hard at the figures, it seems to be year in and year out a pound-swapping exercise with the insurer.
Self-insurance is one of the newest forms of cover for fleets, which can dramatically reduce initial premiums. But is it in the best interest of the brokers to suggest this when their own fee or commission might be reduced? One north-west car transporter with 131 vehicles was recently quoted £320,000 for their motor insurance with a £1,000 excess on each and every incident. The broker never suggested self-insurance. However, another broker who could explain the simple benefits of self-insurance quoted the transporter £110,000 for their motor insurance with a £10,000 excess. This arrangement included a significant cashflow saving and a reduction in Insurance Premium Tax.
| “Are we living in a world where a broker does not broke unless pushed hard by their client?” |
When the car transporter company looked back on previous years’ claims history it was clear that they would have been much better off taking a higher proportion of self-insurance in every single year by thousands of pounds. So if we are living in a world where brokers do not always broke the market, how can fleet decision-makers help them to do the job they are supposed to be doing?
The answer is to make sure the insurance renewal process starts with a meeting eight weeks before the insurance is due. Ask the broker how many quotes they expect to receive. On the claims experience ask the broker what reduction he aims to negotiate for you. Finally, ask the broker to get a self-insurance quote so that at least you can have the opportunity of comparing against the conventional small reductions in premium or worse premium hikes.
For further information, visit the Up2U Group at: Website: www.up2ugroup.com
