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4 December 2018

Motor Fleet Insurance Premiums

The cost of business in the transport sector is increasing. Rising premiums are adding further stress to the industry.

Why are premiums going up and what can you do to mitigate the impact on your business?

Premiums are increasing on almost all vehicle makes and models due to increased crash numbers and higher repair prices. The combination of more vehicles on the road and the costs associated with in-vehicle technology means that the average cost of replacement parts and repairs for motor vehicles is going up.

New Zealand has seen a higher frequency of claims due to our population growth, greater density in urban areas and the types of vehicles involved in crashes.

Figures from the Insurance Council of New Zealand show commercial and private motor insurance claims hit $1.023 billion in the year to September 2016 - up nearly $20 million on 2015.

Has your fleet insurance changed with the times?

If you still have the same ‘off the shelf’ motor fleet policy you put in place several years ago, then your premiums have likely increased each year and you have been lumped into a portfolio underwriting approach. If you haven’t provided a claims history, insurers will have unknown calculations built in to the terms which aren’t going to favourable to you.  

Insurers have increased premiums, but there are things you can do to keep your fleet insurance costs down.

What can you do?

First and foremost, talk to your insurance broker. Given today’s market conditions, the value of your broker’s expertise has never been greater. When things are tough, you need someone with the experience and the contacts to find you the best deal on your fleet cover, and our transport brokers are transport specialists. They understand there are many ways to insure a fleet, and many ways to manage claims to keep costs down for clients.

Risk management begins with risk assessment. The more information we have, the better the analysis we can do to get you a better insurance deal.

  • Look at your claims history - working with your claims history highlights areas for improvement. It allows us to understand patters and trends and helps us tailor your policies, bring down the claims and stabilise premiums.
  • Consider your drivers – if you have young or claims-heavy drivers on your fleet policy it could drive your costs up significantly. Consider your drivers’ driving style, age and experience. Young drivers, aged 17-20, are twice as likely to make an insurance claim as any other driver, and on average the claims cost will be three times higher, and 10 times more likely to involve severe bodily injury.
  • Invest in driver training - make employees aware that you will monitor accidents and introduce training programmes that include defensive driving to advanced techniques. Driver training doesn’t have to be expensive and can pay significant dividends: an improved claims record should be swiftly recognised by insurers.
  • High-value vehicles - try to only appoint drivers with safe track records to drive the high-value vehicles in your fleet.
  • Tailored insurance - combined policies reduce the cost of premiums through economies of scale. A combination of public and employee liability is one example of how to reduce premiums. You may not require a third-party policy protection; comprehensive insurance may be the better option. There are several good motor insurers that as brokers we can approach on your behalf who can help your overall fleet risk management.
  • Renew policies in good time and after proper review - if you’re still doing the same thing you were 3-5 years ago, then it is certainly time to undertake a review. Cruise control doesn’t work with fleet insurance; there is no set and forget.

Through proper analysis we can provide strategies and solutions that will result in a significant premium savings. Talk to us about the right cover to keep you moving. Ask about transport insurance for your business and about regular reviews to ensure your insurance programmes are delivered just right.