One of these drivers is not insured �� fleet managers need to take a more proactive role in reducing insurance risk

Driving without insurance is on the up: the cost of uninsured driving has virtually trebled over the past seven years to nearly 500m [pounds sterling] in 2002, which equates to an extra 30 [pounds sterling] a year on every UK driver's motor insurance premium.

It comes as little surprise that--according to RAC's Report on Motoring 2004--70% of British motorists want prison sentences introduced for the country's one million plus uninsured drivers.

Despite it being in everyone's interest--including fleet managers--to reduce these figures, driving without insurance is not viewed as a serious crime compared to other driving offences. Sustained, hard-hitting Government campaigns on drink driving have completely turned around the perception of this offence, changing it from mildly foolhardy into not just highly dangerous but also socially unacceptable. Similar results are also being achieved with the more recent 'Kill your speed' campaigns; most people no longer consider it perfectly reasonable to break the speed limit.

Historically, the UK Government has not gone far enough to raise awareness of the issues surrounding driving without insurance. Not only does it cause premium hikes for the 95% of the UK driving population who do take out motor insurance, it means that accident victims, their insurers and ultimately the Motor Insurers' Bureau (MIB) have to embark on a lengthy process to resolve their claims for compensation.

The MIB was set up in 1946 by the UK motor insurance industry working with the Government to deal with the victims of uninsured and untraced (for example hit and run) motorists, who potentially have no recourse to compensation. The MIB administers a fund of last resort used to compensate these victims, into which all UK motor insurers pay a levy based on the volume of business they write.

The levy is, ultimately, funded by the honest insured motorist via increased annual premiums.

The way forward is to improve detection and find more effective deterrents. The motor insurance database (MID), an initiative launched in September 2001 by the motor insurance industry, received significant investment from the Government to provide the police with a powerful new tool to fight crime. The MID provides a database of insurance details for all vehicles in the UK Managed by the Motor Insurers' Information Centre (MIIC), the MID also helps the UK comply with the EU's Fourth Motor Insurance Directive which requires that an insurer can be identified through a vehicle's registration number (VRN) to facilitate cross-border claims in Europe.

With around 30,000 police enquiries a day, the MID is proving to be an increasingly useful tool and is a good example of private enterprise working with Government to deliver public benefit.

However, although fleet managers may feel they have more of a passive role in tackling the effects of uninsured driving, much more can be done to improve road safety and combat premium increases by implementing risk management.

Research shows that fleet managers have a bigger role to play in generic road safety, following the independent Work-Related Road Safety Task Group's November 2001 report on Reducing At-work Road Traffic Accidents, which revealed that up to a third of all traffic accidents involve somebody who is at work at the time. This equates to around 20 fatalities and 250 serious injuries per week on UK roads.

The report was followed up in September 2003 by the Government's response--the Driving at Work: Managing Work-Related Road Safely leaflet produced jointly by the Health and Safety Executive and the Department for Transport. Unfortunately, the publication is not a regulation or an approved code of practice. It is merely "notes on good practice which you may find helpful in considering what you need to do".

Bearing in mind Norwich Union's own research, which reveals that 85% of the UK's motor fleets are not carrying out even basic risk management, it's disappointing that the guide does not go far enough and lacks legal clout.

Data gathered from 12,000 of Norwich Union's fleet policyholders during the past 18 months shows that only 15% are implementing a programme of fundamental risk management measures such as driving licence checks, issuing driver handbooks, investigating accidents and pre-employment checks of driver competency and experience.

In addition, less than half of the 15% currently undertaking basic risk management are using any form of ongoing driver training programme to help improve driver performance and minimise risk.

Fleet managers can undertake a variety of initiatives to help control risk and minimise premium increases, and the following real-life examples demonstrate the benefits that can be achieved.

For example, economy driving courses aim to improve fuel consumption, extend tyre life, and reduce maintenance and running costs. Encouraging staff not to accelerate off the lights nor to brake sharply has obvious benefits for accident rates and parts costs such as brake discs and tyres, and also improves the residual value of a vehicle. Getting those extra miles per litre can lead to considerable cost savings when spread across an entire fleet.

A private car fleet operator in the Midlands saved 16% off its annual fuel costs after putting its fleet of 314 drivers through a fuel efficiency training programme. Straightforward advice and training in advanced driver techniques, such as looking further ahead on the road to avoid sharp braking and better use of gears, was delivered on a one-to-one basis.

Fleet management systems, such as Fleetstar from Cybit, can help supervise improvements and identify offenders through the use of vehicle tracking and monitoring. Features such as real-time traffic information, journey playback, planned routing, mapping to street level and mileage tracking can all produce impressive cost savings and efficiency gains.

Those still in doubt over the benefits of telematics should look at the example of a building services company in East Anglia. The firm runs a fleet of 250 vehicles offering building maintenance and repairs, and invested in telematics for 120 vehicles in 2002. Through more efficient route planning, making vehicles pay for themselves by avoiding dead time on the road, looking at traffic flow and vehicle suitability, and maximising just-in-time processes, the company has saved over 90,000 [pounds sterling] in fuel costs.

As well as identifying problem drivers to allocate training resources more efficiently, telematics systems also allow fleet managers to set limits for drivers such as mileage, the number of hours spent behind the wheel and adherence to speed limits.

Even the most advanced driver training will have little impact if the employee is exhausted from an over-demanding schedule, with early starts, late finishes and long distances to drive in between. Telematics systems also help companies to keep a much sharper control of the mobile workforce, including validating personal expenses claims.

In one case, a third party who was involved in a motor accident was claiming a six-figure sum from a dispatch company for personal injury including whiplash, loss of earnings and even loss of sexual performance. Telematics data collected from the fleet vehicle, which was alleged to have hit the third-party vehicle at excessive speed, proved that the actual speed of impact was less than 5mph. The actual payment to the third party was less than 2000 [pounds sterling].

As corporate governance and duty-of-care obligations become more onerous, risk management should be appearing high up on fleet managers' agendas; those who manage their occupational road risks effectively will reap the rewards.

Brian Lee is motor risk manager at Norwich Union, one of the UK's leading insurance groups

COPYRIGHT 2004 DMG World Media Ltd.
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