Following news that fleets are facing higher insurance premiums this year (FN 12.02.09) managers have been advised to tackle risk in order to reduce their insurance costs.

Effectively managing driver risk will pave the way for fleets to approach their insurer and demand that premiums are not increased or that they should be reduced.

While fleets are turning away from driver safety and concentrating on cost management, the two are in fact closely related – manage risk effectively means fleets are also managing costs effectively.

The benefits of driver training are clear in this area, and increasingly telematics is also playing an important role in altering driver behaviour and reducing risk.

The arrival back on the market of ‘pay-as-you-drive’ insurance deals for fleets (FN 15.01.09) means those companies that use vehicles at specified times may be able to avail of cheaper insurance deals.

Now a ‘pay-how-you-drive’ insurance deal, which is initially being aimed at private motorists has the potential to allow fleet managers to approach their insurer with definitive evidence of a change in driver behaviour as well as proof of an improving claims history.

GreenRoad is now working with Admiral to target young drivers with its pay how you drive scheme.

The scheme rewards young drivers who drive safely with reduced insurance premiums.

The insurance savings can be significant - Admiral is currently offering a 25% discount to all the young drivers participating in the scheme.

“Admiral is the first insurer to directly reward people for how they drive,” said Eric Shishko, senior vice president, insurance and consumer at GreenRoad.

There is no reason why this model cannot be transferred over to fleets.

Greenroad, which is already well-known to many fleets for its real-time monitoring and driver feedback, says that its system could not only help fleets cut their crash rates, but also be used as a negotiating tool when looking for premium discounts.

“Insurance rates will harden, there is no doubt,” warned Mr Shishko.

“Therefore companies that can demonstrate they have safer drivers will be better placed.

“In any case where vehicles are driven by risky drivers, there is an interested insurance company and now some advisors are saying ‘yes you must act and make your company drivers safer’.

“There is a tangible economic value to the insurer,” explained Mr Shishko.