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Fleet Insurance
Insurance is a big factor, in the total operating cost structure. It is in turn affected by the rate and rand value of accidents. This depends on driver training and attitudes. You need a 'carrot and stick' approach.

It naturally follows that if accidents are controlled or prevented, insurance costs will be contained. It is, therefore, essential to introduce an Accident Control Programme as a first step. Elementary parts of the programme should be as follows:

• Incentives for good driving.
• Penalties for accidents.
• A driver training programme.
• Accident analysis by driver and incident.
• Risk management analysis profiles to ascertain a matrix of vulnerable drivers, vehicles, situations, etc.
• Management activity to take and implement corrective action.
• Accident reporting procedures.
• A half-yearly review on loss ratios, accident trends, assessment, third party recoveries, repair costs, comparisons, turn around times, standard of work, fitment of genuine parts, substitute vehicles.
• Substitute car supplier's i.e., rental companies.

Generally speaking, insurance companies/brokers are not in touch with fleet management operations. They will always separate insurance and fleet management. This generally results in the fleet paying more for insurance than is necessary. More and more companies are going the self-insurance route and reducing costs. However, it needs to have proper control. The interplay between the, fund, catastrophe cover, insurance premiums for cover over the aggregate excess, investment returns, administration costs per accident, VAT input and payment all affect the ultimate cost of insurance.

A thorough evaluation of the company's fleet operation is essential in order to introduce an effective Accident Control Programme. These programmes have resulted in savings of up to 50% in some South African fleets.

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