The Path to Sustainable Low-Cost Motor Insurance for SMEs - Part Two
Bang! How To Have Fewer Motor Insurance Claims
Most motor claims are due to crashes. Recent research in Canada found that 84% of respondents who drive at-work believe crashes are unavoidable***. In fact, almost all are preventable. It’s only after a bad one that SMEs realise there are big uninsured losses. For SMEs, having a strategy to reduce the frequency and severity of collisions is essential (and it is the law). The best approach to avoiding crash pain is prevention and cure.
While the goal of less crashes is easily stated, “hope is not a strategy”. It sounds counter-intuitive, but SMEs can take steps to reduce road risk. Of course, when an employee is driving for work, they are in the driving seat and being out of sight, there’s no direct control from the business. However, every business has a distinctive culture, management practices and the opportunity to create a driving environment that allows and expects safe driving, rather than making it worse. Are you ready?
As management guru W. Edwards Deming famously put it, “if you can't describe what you are doing as a process, you don't know what you're doing”. So, if road risk management is new to you, here are seven useful pointers:
1. Today your business is probably absorbing a €500 hidden and avoidable cost per vehicle per annum due to crashes and poor driving. One leading insurance provider suggests that uninsured losses of at least four times the claim cost is a good rule-of-thumb. Excess fuel-use and vehicle wear and tear too can be a source of significant savings.
2. Some stories can help illustrate the opportunity. SCL, a Dublin SME cut its insurance claims and premium and generated a 9X return on investment after investing in mobile telematics. Meanwhile food giant Nestle were 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.
3. Start your journey with a plan. Better still, use a Plan, Do, Check Act (PDCA) process that sets direction, gets things done and reviews progress. Fleet risk management is a like any journey – it helps to have a “roadmap”.
4. A great tip on how to control workplace risks can be found in health and safety law, which recommends businesses use “instruction, information, training and supervision”. When it comes to driving, hallmarks of best-practice include having a good policy, communicating regularly, targeting learning and monitoring performance.
5. Realise that when it comes to driving, SMEs often “don’t know what they don’t know!”. Without visibility into who is driving when, where and how, you have to guess what is happening. And as legendary investor Warren Buffet succinctly puts it, “risk comes from not knowing what you're doing”.
6. Seek help – learn from other SMEs and organisations which have shared their journey to lower claims, losses and harm. Recommended sources include the ETSC (EU), Driving for Better Business (UK), NRSPP (Australia), NETS (USA) and of course, DriverFocus blogs and resources.
7. Every mile driven is a risk taken so as the Covid-19 pandemic has shown, it is possible to reduce risk by avoiding the need for staff to drive. So, embrace opportunities for remote or hybrid working and promote safer, more sustainable travel alternatives.
While these steps all help create a safer driving culture in your business, in the third and final part of this series, we will focus on the #1 cause of road crashes: How to Improve Driver Behaviour.
Sources:
*** RoadSafetyAtWork.ca September 13, 2021 - "84 per cent of people who drive at work believe (crashes) can’t be avoided"
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