Arval is aiming to tap into a significant number of UK fleets that are looking to their leasing provider to insure their company vehicles.

Research commissioned by the contract hire company shows that fleets in the UK – unlike their mainland European colleagues – opt for one of two solutions when it comes to insurance. They either use an insurance broker or go direct through an insurance company.

However, a significant number of fleets on the continent insure their vehicles through their leasing company and Arval’s research suggests that their UK counterparts – certainly among SMEs – are poised to follow suit.

Almost one-in-four businesses (22%) with fewer than 100 employees surveyed by the leasing company said they would consider taking insurance through their leasing provider.

Larger companies were less positive with just 3% saying they would consider it, while another 3% were unsure.

Arval offers two products in the UK. Arval Total Care allows fleets to choose an insured lease vehicle. It includes contract hire with third party insurance, own damage protection, glass damage protection, maintenance management, breakdown assistance and accident management.

The company also recently launched an insurance product which enables coverage of an entire fleet of vehicles, including cars and vans that it does not fund.

Robert Pieczka, marketing and insurance director at Arval, said: “Products like this have been popular across other European countries for a number of years where we see high levels of take-up. With the benefits that these products provide, we anticipate a growing number of businesses in the UK will consider this alternative option.”

Arval isn’t alone in recognising potential in the UK fleet insurance market. LeasePlan and Alphabet, like Arval, sell fleet insurance to European operators, while also offering policies to UK customers.

However, Alphabet believes the way policies are structured here means it will more than likely remain a niche product.

Richard Schooling, Alphabet chief executive, explained: “It’s more widespread on the continent, where it is often mandatory. Here, fleet insurance is bundled with general insurance. Often fleet managers say that it’s the insurance department – not their problem.”

With policies in the UK providing cover for buildings and office equipment, as well as vehicles, it makes them difficult to unbundle. “ take-up in the UK is in the hundreds, not thousands,” Schooling continued. “We don’t see it being as mainstream here.”

However, Arval’s research suggests that almost three-quarters (72%) of companies with fewer than 100 employees and more than half (53%) of larger companies have separate fleet insurance policies, making comparisons and switching much easier than previously thought.

In fact, many fleet operators already have insurance policies with leasing companies if they offer employees access to a salary sacrifice scheme. The cars are being provided with what looks like a retail insurance product to the employee, but which is effectively a fleet policy.

Ben Creswick, business development director at accident management company FMG, believes it can pave the way for the leasing industry to develop a wider insurance offering.

“Salary sacrifice is a steppingstone to leasing companies offering insurance,” he told Fleet News. “The leasing companies want to get into the insurance market and if businesses are running comprehensive risk management programmes those drivers will be ‘gold’ standard.

“They’ve been licence checked, they’ve done online training, they’ve done on-the-road training and they’ve probably got telematics in their vehicle.”

Like Creswick, Hein du Plessis, LeasePlan UK head of new product development, expects salary sacrifice to provide the platform for a wider fleet offering.

He said: “We often find that drivers like the comfort of knowing that all their services are managed by one provider and the cost of the insurance is fixed and paid as part of the monthly lease rental.

“Therefore, including fleet insurance in the lease arrangement for business fleet customers is a logical next step and could provide further cost and efficiency benefits for fleets.”  

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