Fleets turn to fixed cost insurance as premiums rise, says Arval UK

Interest from fleets in fixed cost motor insurance is growing as new vehicle technology starts to increase premiums, says Arval UK.

A report from the Association of British Insurers states that claims repair costs in the first quarter of this year were £1.2 billion: the highest on record.

It says this rise is being fuelled by new technology such as ADAS devices and sophisticated headlights which are being fitted to new cars, which are more expensive to repair which, in turn, is starting to have an effect on premiums.

Ian Pearson, head of insurance at Arval UK, said the situation is having an impact even on fleets that employ advanced and successful risk management strategies.

He added: “There are fleets that work very hard at controlling their risk and have improved safety and reduced their premiums as a result but even they can have little influence over repair costs.

“Of course, those fleets that already have a poor claims record are being even more adversely affected.”

Pearson said the rising premiums have led to an increase in interest in fixed cost insurance products.

He added: “It does mean a shift from the normal fleet insurance mindset, but there are a whole range of advantages to securing cover in this way.”