The repair bill that lands on a fleet manager’s desk isn’t the only cost arising from an accident.

There are lots of hidden ones too, such as time lost and administration.

In theory, an accident management company should be able to minimise some, or all, of the hidden costs associated with an accident, as well as reducing the repair bill.

It steps in from the moment of impact, taking the initial call from the driver, and can manage the process until the claim has been finalised and the vehicle is back on the road.

Mark Scanlon, managing director of FMG Support, which offers an incident management service, says that accident management is about reducing the cost of every element of the claim, whether fault or non-fault cases.

Growing awareness

More fleet managers are becoming aware of the benefits of an accident management service, says Penny Stoolman, managing director of Total Accident Management.

“Two years ago, when we carried out in-depth interviews with 25 customers and members of the fleet industry, there wasn’t that understanding,” she says.

“Fleet managers had heard about accident management but there was a broad range of descriptions of what it actually meant.”

Many fleet managers will have come into contact with accident management through their contract hire and leasing companies which can offer it as part of a package.

Tina Samson, reward manager at Punch Taverns, currently leases vehicles through Lloyds TSB Autolease and has accident management included in her agreement.

“It means that for our drivers Lloyds is a ‘one-stop shop’,” she says.

The advantage is that a driver just has one number to call whether it be to report an accident or for a maintenance issue.

But even if a leasing provider offers accident management, it may still be worth getting a quote from a separate provider.

At the time of setting up his leasing agreement Julian Daley, reward manager at Carlsberg UK, found that a separate accident management provider offered a more competitive deal than his leasing provider.

It could also be better to have a separate accident management company if a fleet is funded through several methods or uses more than one leasing company.

Arthi Appathurai, deputy fleet manager, London Borough of Hackney, started using FMG Support last year for that reason.

“We’ve got about 360 vehicles and they are all leased,” she says.

“We use different leasing companies so it makes sense to have a separate accident management company then it’s all under one umbrella.”

And for those fleet managers that find their fleet department is shrinking, an accident management company could be a necessity.

Ways to save

Reducing the time a vehicle is off the road is one of the main ways that an accident management company can deliver cost savings.

“Replacement vehicle costs are directly linked to vehicle off-the-road time and significant savings can be made with close management of downtime,” says FMG Support’s Scanlon.

“One of our clients saved more than 1,100 days in one year. In addition to the replacement vehicle cost, they also reduced missed appointments and inconvenience for their field team, which equated to £286,000 of savings.”

Stoolman says that one of Total Accident Management’s clients reduced their vehicle off-the-road time by 54% in three months.

It is worth finding out what a provider’s average vehicle off-the-road time is and how it compares to industry standards.

FMG Support achieved an average of eight days over the past 12 months, compared to the industry average of 12 days.

Another provider, WNS Assistance, says its average is 5.4 days.

Cheaper repair bills are another benefit.

An accident management provider should have a network of repairers and be able to offer nationally-agreed labour rates. WNS Assistance says that it uses its purchasing leverage (it claims to be the third largest purchaser of vehicle repairs in the UK) to negotiate terms with repairers.

As with vehicle off-the-road time, fleets should find out a provider’s average repair costs and benchmark it.

Average repair costs increased from £1,010 in 2007 to £1,175 in 2008 according to a Trend Tracker survey.

Over the same period, FMG Support’s average repair cost was £892.

#FNN_ART_SPLIT

Accident management companies can also reduce the cost of at-fault accidents through ‘third-party intervention’ or ‘third-party capture’.

Essentially, they contact the driver that has been hit and manage the process of getting their car repaired and back on the road.

Total says that for self-insured fleets this can bring savings of £424 on each at-fault accident.

Management information

Increasingly, accident management companies are providing information which can help a fleet operator identify trends, reduce risk and, in turn, reduce their insurance premiums.

“Fleet managers can tell us how much data they want us to record during the first notification of loss,” explains Mark Turner, vice-president sales and marketing at WNS Assistance.

“They might want us to ask how many hours the driver had been at the wheel, when they last had a break and if they had ever been offered driver training.

“Our online approach also means that fleet managers can depict areas of risk, such as which cost centres or depots are having the most accidents, the time of year accidents are happening and the types of accidents.

"If drivers are continually hitting bollards at one particular depot, for instance, it may prompt the manager to look at the reversing bays.”

Appathurai says that data capture was one of the reasons the London Borough of Hackney decided to use an accident management company.

“The data collection is very useful.

"We have lots of different departments in the council and I can now see how well each one is doing.”

The benefit is that this can then lead to identifying a driver training requirement.

Tailored solution

Fleet managers can choose to outsource all or part of accident management.

Debbie Floyde, fleet manager for Bauer, outsources the first notification of loss to Zenith Vehicle Contracts but not uninsured loss recovery or third-party claims as her insurance company prefers to “keep tabs on those”.

David Blacklock, head of insurance at the Fleet Support Group, says he will build the service around what the fleet wants.

If they have an existing agreement with the AA to provide breakdown cover, for instance, this can remain.

Total Accident Management also takes a tailored approach, with fleets able to choose from full accident management to third-party intervention only.

Stoolman says that 65% of Total’s clients opt for full accident management.

“I wouldn’t say all fleet managers should outsource entirely,” Stoolman cautions.

“They just need to review whether they are using all the tools in the toolbox and whether they are getting the best out of an accident management company.”

What’s the catch?

Some companies may claim to offer accident management for free or for a small fee a month, but fleet managers need to find out whether they are taking a percentage of the repair costs for own fault accidents.

This could range from 10% to 20%, according to Turner.

He says: “Fleet managers can be guilty of looking at the cost of the service rather than the cost of the repair.”

An accident management service may not be worthwhile for very small fleets with fully comprehensive insurance.

Larger fleets with third-party insurance or who self-insure stand to gain more from the service.

WNS targets fleets with 500 or more vehicles, while FMG has customers with fleets of 50 to 40,000 and FSG says it can cater for fleets of 15 to 8,500 vehicles.

#FNN_ART_SPLIT

Fleet operators may also find it is not worthwhile if their vehicles are concentrated in one area and they can negotiate a deal with a local repairer.

Or they may feel that they do not have enough accidents to warrant paying for a service.

The other consideration is whether the provider is likely to be around long-term – what’s their current financial situation?

Finally, it’s important to remember ‘the driver’ in the accident management process.

Although providers can take care of administration, a good fleet operator should put a call in if they believe their driver is injured or in shock.

At the end of the day, the driver’s well-being is just as important as how much the accident costs.

Questions to ask your supplier

  • Do I have to delegate the entire accident management process or can I do some of it myself?
  • How well is the driver kept informed during the process?
  • How do you audit repairers and suppliers? Do you mandate the PAS125 bodyshop standard?
  • What’s the average length of repair and how does it compare to industry standards?
  • What’s the average vehicle off-the-road time and how does it compare to industry standards?
  • Will off-the-road vehicles be replaced like for like?
  • What legal services do you provide?
  • What’s your non-fault capability?
  • What training do the operators and engineers go through?
  • Will you be able to channel the repair appropriately? For instance, by using a smart repairer rather than a garage if it’s more suitable?
  • How much of the process can I view online? Can I see photos of damage, for instance?
  • What management information do you provide?
  • How is the service paid for?
  • What contract will I be tied into?
  • How often do you survey drivers for feedback on the service?