Preventing costly crashes
For members with cars or vans, motor insurers are now rewarding loss prevention upfront. Here is how your business can save €1,000 per vehicle and better protect staff.
Globally, insurance is transforming from “recovery after risk” to “prevention of risk” as AI, sensors and other tech help prevent loss and harm.
For your business, here are three takeaways:
- Insurance companies are for-profit institutions, so it helps to understand that insurers are buying your risk. When your business makes itself attractive to underwriters, you will get better quotes.
- Revolut just announced app-based motor insurance with extra savings for individuals who opt for “Smart Driving.” Similarly, business motor insurers will now reward your efforts to prevent motor claims. This is a “discount for data” model which works for both insurance companies and businesses who can evidence risk management.
- HSA research shows that most Irish businesses are not proactive about reducing driving risk, despite their legal responsibility to do so. When it comes to driving at work, what is not getting measured is not getting managed and directors can be held accountable.
Let’s now look at how your business can go about reducing costs and exposure to risks:
Recent research in Canada found that 84% of respondents who drive at-work believe crashes are unavoidable. In fact, the opposite is true – most, if not all collisions are preventable.
All businesses in Ireland must by law, have a strategy to minimise harm in the “workplace” – a term which also applies to vehicles.
When staff drive, many businesses also believe that they have little or no influence on what happens. This is a mistaken and often costly assumption. Every organisation has a distinctive culture, management practices and a real opportunity to either create a driving environment that allows and expects safe driving, or one which increases crash risk.
Today, you may be incurring €1,000 per vehicle per annum in extra cost due to crashes and poor driving behaviour. One leading underwriter advised that uninsured losses of at least four times the claim cost is a good rule-of-thumb.
Two case studies may help illustrate an alternative path: Sales Cosmetics, a Dublin SME, cut its insurance claims and premium and generated a 900% return on investment with mobile telematics. Meanwhile food giant Nestle was compelled to act after calculating it needed to sell an extra 235 million bars of Kit Kat just to cover the cost of its fleet risk in Europe.
Without data, you can only guess what is happening in your fleet. So, to reduce risk, start with a plan, gather data and review your progress. Fleet risk management is a like any journey – it helps to have a “roadmap.”
Seek help – learn from other businesses and organisations which have shared their journey to lower claims, losses and harm. Check out recommended independent sources on DriverFocus blogs.
While these steps all help create a safer driving culture in your business, success ultimately depends on addressing the #1 cause of road crashes: driving style.
So how can your business improve driver behaviour?
The human cost of crashes really can't be counted. However, the financial cost can be, and a poor driving style takes €1,000 per vehicle from your bottom-line. While the right organisation culture, leadership and policies are shown to help improve performance, here are four additional tips to consider:
- Clear comms – share regular messaging of goals, good practices and insights.
- Analyse crash history – what are the trends across your fleet? Take steps to avoid repeats and follow-up with drivers to emphasise intent about crash reduction.
- Use carrots – such as rewards for individuals or teams who save fuel - and sticks – in-house sanctions like paying the excess on a claim can deter bad habits.
- Technology – the right tech is a powerful ally. Choose a telematics or dashcam system that gives the behavioural insights and privacy safeguards you need, rather than lots of data.
Finally, a word of caution: if “driver training”, is seen as your “go to” solution, bear in mind the National Office of Traffic Medicine recently advised that at-work driver retraining to improve safety is an “urban myth”. Rather, when it comes to “behaviour modification”, research shows “incentive schemes, group-based discussions plus goal setting and feedback programmes” are what really work.
Director and Founder DriverFocus
About DriverFocus: Since 2007, DriverFocus has helped leading Irish businesses avoid harm and loss by delivering affordable IOT, cloud technology and best-practice risk management.
AVERT™ is a low-cost insurtech offering for businesses with five or more cars or vans. Ask your broker about AVERT™ today or learn more at driverfocus.ie/avert
