Fleet risk An overview by LeasePlan UK July 2018 What is risk? - - PowerPoint PPT Presentation

An overview by LeasePlan UK July 2018

Fleet risk

• The Oxford English Dictionary

defines ‘risk’ as follows:

What is risk?

• When we talk about fleet risk, we

are talking about fleet-related situations that could be dangerous

• r have an undesirable outcome.
• When we talk about risk

management, we mean not just the prevention of these situations, but also the correct response to them. Risk : ‘A situation that could be dangerous or have an undesirable

• utcome.’

There are three main reasons why fleets need to manage risk:

Why do fleets need to manage risk?

To avoid accidents 01. To save money 02. Because we are legally obliged to! 03.

According to the Department for Transport’s statistics:

Avoiding accidents

38,028

Vehicles involved in personal injury accidents in 2016

That’s about 100 a day! 25% of all casualties during that period

In the five years to 2016, there were 238,082 casualties in accidents involving someone driving for work

Sources: DfT, Reported Road Casualties Great Britain: 2016 (2017), Tables RAS30036 and RAS30037

Every time an accident happens, it incurs financial costs for the fleet involved. These can include:

Saving money

– Higher insurance premiums – Welfare and medical fees – Fines and court costs – The cost of repair – The cost of downtime and of reduced productivity

£750

We calculate the average cost of having a van out

• f action per day is

Source: https://insights.leaseplan.co.uk/fleet-issues/commercial-vehicles/interview-van-best-practice/

There are many regulations surrounding fleet

• risk. Many of them are neatly summarised by

this passage from 1974’s Health and Safety at Work Act:

Legal obligation

• It is important to remember that the law

applies to all fleets equally – not just big fleets with big compliance teams.

• If anything, smaller companies have more

to lose from not thinking about risk

• management. They could be totally ruined

by the costs arising from any incidents. ‘It shall be the duty of every employer to ensure, so far as is reasonably practicable, the health, safety and welfare at work of all his employees.’

Source: https://www.legislation.gov.uk/ukpga/1974/37

• A good place to start is the Health and Safety Executive’s Driving at

Work document.

• This summarises both the law and how its requirements can be
• met. Fleets should measure their current performance against it,

and then devise a plan to overcome any shortfalls.

• Three themes emerge from the HSE’s recommendations:

How do we manage risk?

Regularity

1

Breadth

2

Vigilance

3

Source: http://www.hse.gov.uk/pubns/indg382.pdf

• Risk management cannot be done every so often
• It must be part of a fleet’s everyday work
• For example, vehicle checks should be performed on a daily
• basis. These should cover:

Regularity

Brakes Tyres Wheel fixings Windscreen wipers Lights Mirrors Bodywork Trailer couplings Number plates Load security Ancillary equipment

1

• Risk management encompasses more than just the

vehicles that are owned or leased by a company

• It also encompasses the ‘grey fleet’ vehicles that belong

to a company’s drivers…

• …and the drivers themselves.
• Drivers should receive training throughout their employment:

– General induction training when they join – Refresher training, including updates on any new laws – Special training for drivers identified as higher risk

Breadth

2

• Fleets should record and review as much data as possible
• This serves several purposes:

– It enables fleets to make the right choices about their risk management policies – It helps fleet managers to persuade others in their organisation – It can strengthen the company’s case in the event of any accidents, e.g. with insurance companies – It can reduce the likelihood of accidents in future

• Telematics are an increasingly important part of this process

Vigilance

3

• Risk management should not be an afterthought, nor regarded

as a burden.

• It saves fleets both time and money – and not just because it

reduces accidents. It also helps keep vehicles in generally good condition, cutting down on fuel bills and maintenance costs.

• Most importantly of all, risk management improves the

happiness and wellbeing of a fleet’s workforce – as well as of everyone else on the roads.

Conclusion

The hidden costs of accidents

Cost analysis

Broadly speaking, there are two types of cost associated with road traffic accidents and incidents:

The two types of cost

• 2. The hidden costs

These are all the other costs of the

• incident. Generally, they are much less

easy to quantify – but they can be many times more expensive than the repair itself.

• 1. The direct costs

These are the clear and immediate costs that arise from the incident – most

• ften, the cost of repairing the vehicle

that was involved.

• It’s worth observing that road traffic accidents

have an immense macroeconomic impact.

• According to the Department for Transport:

– In 2016, the lost economic output due to road traffic accidents amounted to £4.6 billion – which is to say, the economy was about £4.6 billion smaller than it would have been had those accidents not occurred – When other elements, such as property damage and insurance, are factored in, the total cost of accidents that year was £36 billion

Source: DfT, Reported Road Casualties Great Britain: 2016 (2017), Table RAS60003

The economic effect of accidents

£4.6 billion

in lost economic output

£36 billion

total cost of accidents

• And if we look specifically at those road

accidents involving people driving for work: – 38,028 work vehicles were involved in accidents in 2016 – In 2014, the lost output from work-related road accidents amounted to £491 million

Sources: DfT, Reported Road Casualties Great Britain: 2016 (2017), Table RAS20010, and IAM RoadSmart, Evaluating the costs of incidents from the public sector perspective (2016)

The effect on fleets

38,028

vehicles involved in accidents

£491 million

lost output from accidents

Beyond these huge headline numbers, what actually is the direct cost of an accident for a fleet?

The direct cost

32% >

higher cost compared to three years ago

£1,678

the average cost of repairing a car after an accident.

Source: https://www.abi.org.uk/news/news-articles/2016/12/motor-insurance-premiums-reach-highest-recorded-levels/

Why are repair costs rising?

What explains that 32% increase in the average repair bill? The Association of British Insurers gives two reasons: ‘[The] rising cost of spare parts due to currency fluctuations.’

1

‘Increasingly complex vehicle technology.’

2

Source: https://www.abi.org.uk/news/news-articles/2016/12/motor-insurance-premiums-reach-highest-recorded-levels/

• As a measure of how many more costs there are other

than repair costs, the International Loss Control Institute says that, for every £1 an insurer pays out for an accident, the uninsured losses can be as much as between £8 and £53.

• These extra, hidden costs can include:

The hidden costs

Vehicle downtime Reduced productivity Replacement vehicles Court costs Insurance premiums Fines and compensation Reputational damage Administration Accident investigation

Source: https://www.fleetnews.co.uk/fleet-management/risk-management/what-is-the-true-cost-of-a-collision-experts-explain

• So far, we have been looking mostly at financial costs.

There are, of course, other, sadder costs arising from accidents.

• The Department for Transport reveals that, in 2016:
• This means that 24% of that year’s casualties involved people

driving for work.

The human cost 38,250

people slightly injured in accidents in accidents involving someone driving or riding for work

5,269

people were seriously injured

529

people were Killed

Source: DfT, Reported Road Casualties Great Britain: 2016 (2017), Table RAS30037

• The human dimension results in other

hidden costs for fleets.

• These may include:

The hidden human costs

Temporary staff replacement Permanent staff replacement Third-party injury costs Counselling Re-training Welfare and medical costs Lost expertise

• Once an accident has occurred, there are ways for

fleet managers to keep costs down.

• For example, reporting the accident swiftly to an insurer or incident

management company can help to prevent costs from spiralling. According to FGM, a failure to do so can increase costs by up to 900%.

• In which case, fleet managers should make the reporting process quick

and convenient for their drivers – perhaps by establishing a 24-hour helpline, or by using an app.

Ways of controlling these costs…

Source: https://www.fleetnews.co.uk/fleet-management/risk-management/what-is-the-true-cost-of-a-collision-experts-explain

• Of course, the best way to avoid these costs

is to avoid accidents in the first place – which is what proper risk management can achieve.

• If fleets invest in things such as driver training, vehicle

maintenance, telematics and route-planning, then they should be sparing themselves from even bigger bills in future…

• …as from well as the tragic, human costs that arise from

accidents.

…but the best control is risk control

How can LeasePlan help?

LeasePlan Fleet Risk Management

RiskAWARE Improving client value through delivery of active prevention and cost reduction

Vehicle Management Driver Behaviour Risk Management Services

Active prevention – reducing incident rate Cost reduction – management of incident costs

• Telematics
• SafePlan driver programme
• RiskAWARE
• Telematics
• My Vehicle Check AP
• UPTime
• Accident Management
• RiskAWARE
• 3D

Active prevention – reducing incident rate

RiskAWARE

Telematics UpTime My Vehicle Check

Vehicle Management

• Vehicle Data with technical faults feed
• Unit sends alerts to driver App &

manager Portal

• Can link into UpTime
• Real-time visibility and reporting of

Vehicle Management

• Proactive maintenance booking

based upon technical alerts from Telematics

• Digital vehicle check by driver via smartphone
• Streamlines Admin
• Responsibility with Driver for vehicle roadworthiness

Proactive identification and action to keep vehicle safe and roadworthy

Telematics

Vehicle Insight

• Dashboard
• Real-time reporting
• Mileage capture & journeys
• Live GPS location
• Vehicle diagnostic and health

Features

• Geofencing
• Mobile App
• Crash detection
• Full reporting suite

RAC Connected

A Platform with 4 Key Functional Pillars

Driver Behaviour GPS Services Crash Detection Vehicle Data

Information presentation: portal, apps, reports, data feeds

1st generation driven by the needs

• f logistics and

service industries 2nd generation driven by the needs of insurers and later adopted as a risk management tool for

• fleets. Crash detection has evolved to be high

accuracy and dependable 3rd generation driven by the needs of fleet managers, Lease Co’s and insurers

Key Benefits for Fleet Managers: Monitor location and journeys for fleet productivity Reduce risk and cost through informed driver training Full crash reporting supports insurance claims Access key vehicle data remotely Vehicle diagnostics can reduce vehicle downtime

My Vehicle Check App

My Vehicle Check - App

3 9

My Vehicle Check - App

4

My Vehicle Check - App

Summary Only Leasing supplier currently providing First Use Inspection App

• Only App to integrate into other services – Glass,

Tyres, servicing VOR reporting or UPtime Live if utilised

• Cost effective (discount for FORS members)
• Updates and new functionality in the pipeline
• Integral part of Business Critical Fleet credentials
• Can work on all vehicles in your fleet, including
• nes not owned by LeasePlan

My Vehicle Check – Summary and Benefits

Benefits

• Available on iOS, Android and Windows
• Immediate defect notifications, which

can be sent to repairers

• Suite of reports to enable effective

management

• FORS and FTA Van Excellence

compliant

UPtime

• Fleet Tracking
• Mileage Capture
• Geo-Fencing
• Telematic--related reports
• Event Management
• VOR Management
• Breakdown / Driver Care
• Defect Management
• Document Management
• Compliance / Duty of Care
• Account Management
• Telematic Data
• Fleet Management

UPtime Live - Real Time Portal

P A

Vehicle Service, Maintenance & Repair

• Routine servicing in-line with manufacturers’ recommendations
• All scheduled events in-line with legislation / customer requirements
• Wear & tear, defects and non-scheduled repairs
• Document management

Events Management / Event Booking (time and/or mileage based)

• Advise customer and service agents on all forthcoming events
• Proactively deal with all defects reported – Vehicle Check app
• Progress / chase scheduled & unscheduled events daily

Ancillary Equipment / Body Maintenance & Repair

• Exactly as per the ‘parent asset’ and coordinated with it

UPtime Live – Event Management

Vehicle Off-Road (Downtime) Management

• VOR managed utilising integrated telematics technology real time
• Proactive calls to all vehicles arriving in garages for unscheduled Geofencing
• Progress chased daily to completion
• Customer issued with status report
• Customer VOR reporting available
• Proactive in managing issues to resolution
• Advise customer of VOR incidents

(scheduled or non-scheduled)

UPtime Live – Real-time VOR Management

Increasing fleet ‘UPtime’ is a culmination of:

• Ensuring all Scheduled Events are proactively managed around

both time & mileage

• Ensuring all Defects & Unscheduled Events are proactively managed to a

swift and satisfactory conclusion

• Monitoring & managing vehicle Downtime to ensure maximum utilisation and

minimum disruption

• Providing proactive Driver Care to expedite operational support
• Maintaining & managing Documentation and reports
• Understanding the customer’s requirements and tailoring the above to match

their business needs

• Ensuring all relevant repairers fully understand these requirements, are

capable and fully engaged in their delivery

UPtime Live

• Reduces costs by helping fleets drive down VOR through

real-time monitoring of scheduled and unscheduled work.

• Plans and executes the most efficient maintenance programme by

using the telematics already in your vehicles.

• Vehicles are maintained and to the highest levels, meeting your operational

and legal obligations.

• Cuts administration because everything you need is in one place and

monitored 24/7.

• Live data available for you to answer incoming queries from business unit

managers enabling them to manage their departments efficiently.

Benefits of UPtime Live

Active prevention – reducing incident rate

RiskAWARE

Telematics SafePlan RiskAWARE

Driver Behaviour

• Driver scoring system based on 5

areas:

• Speeding
• Harsh acceleration
• Harsh braking
• Night time-driving
• Urban driving
• Unit sends alerts to driver App &

manager Portal

• Can link into SafePlan training

programme

• Menu of e-learning modules (25)
• On road & classroom training
• Holistic Programme for Drivers to:
• Check
• Assess
• Train
• Review, Benchmarking & Recommended intervention
• Comparison on Fleet management & Driver

performance data

71% of road accidents are down to human error

Source: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/668504/reported-road-casualties-great-britain-2016-complete-report.pdf)

Telematics

The benefit to drivers

Driver Alerts

• Driver Behaviour
• Delays On Favourite

Journey

• Vehicle Health
• Service Due

RAC Driver App - Motorists world in their hand

Driver Behaviour

• Overall Score
• Score Breakdown
• Set Alerts

Journeys

• Historic Journey
• Business/Private Split
• Favourite Journey Events
• Present Location

Vehicle Health

• Faults
• Servicing
• Call RAC

Driver Overview

• Scoring
• Key Factors
• View Events
• Call insurer

• RAC Advance offers driver scoring capability
• The scoring system is based on 5 areas:
• Speeding (based on the speed above the road limit and

the duration of the event)

• Harsh Acceleration (based on the G-forces created

during acceleration)

• Harsh Braking (based on the G-forces created during

breaking)

• Night time driving (proportion of drive time at night)
• Urban driving (proportion of driving on urban roads)

Driver Behaviours

• Monitor driver performance
• Monitor driver, vehicle usage, mileage and

maintenance records

• Monitor vehicle reliability and record with

confidence crash notification, link to Driver Performance where necessary

• Prompt and accurate information about collisions

Driver Behaviours

SafePlan

Fleet compliance, corporate & social responsibility including Grey Fleet managed on-line.

RiskAWARE 3D Insured Fleet 71% of road accidents are down to human error Are your drivers driving safely? Are your accident rates & costs increasing? Are you using and auditable system to manage risk?

Company Car Drivers Cash Takers Occasional Business Drivers

LeasePlan SafePlan

Source: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/668504/reported-road-casualties-great-britain-2016-complete-report.pdf)

RiskAWARE

Online visibility and accountability for operational road risk Set alerts for drivers’ outstanding tasks

• An on-line portal tracking employees who

drive on company business to help you manage operational road risk

LeasePlan SafePlan

RiskAware

RiskAWARE 3D Insured Fleet

A single incident costs UK fleets on average £2,103 in repair costs alone with additional costs from downtime & any personal injury. 71% of road accidents are down to human error

Are your insurance costs escalating? Are your accident rates & costs increasing? Are your drivers driving safely?

LeasePlan RiskAWARE

Driver-level detail of risk through comparison of multiple data points.

Sources: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/668504/reported-road-casualties-great-britain-2016-complete-report.pdf)

• Dept. for Transport statistics 2016

Cost reduction – management of incident costs

RiskAWARE

Accident Management RiskAWARE 3D

Risk Management Services

• Bringing Active Prevention & Cost

Reduction together in one product

“As vehicles become more technology dependent, the ABI reports that the average repair cost has increased 32% over the past three years due to the complexity of repairs. This is compounded further by the increased cost of spare parts because

• f the current weakness of the pound.”

“motorists are likely to see their vehicle insurance premiums increase by 10%”

Sources: Steve Green, director at Anthony Jones Insurance Broker. Article Fleet News Mar 2017 Mark Godfrey, RAC Insurance Director. Article ACFO Mar 2017

Accident Management

LeasePlan Accident Management

RiskAWARE 3D Insured Fleet

Supplier Management Call Handling (FNOL) & Claims Admin Repair Management – Cars & CVs Rental Damage Claim Uninsured Loss Recovery Fleet Indemnity – non fault Reporting / Insight

Core Service

• LeasePlan manages

service through specialist partner FMG

• Clients benefit from LP

supplier management, insurance liaison & consolidated billing

RiskAware

Dashboard

A dashboard from a vast range

• f driver activity held by

LeasePlan and our third party suppliers, and delivered within

• ne dashboard, which include:

In a Nutshell

• LeasePlan’s RiskAWARE increases awareness of high-risk drivers
• The impact of accidents and downtime is costly and resource

intensive, isolating time to identify root cause is a challenge.

• RiskAware provides a quarterly dashboard with data-led insight,

highlighting drivers that are creating the most “avoidable” cost, and help develop an effective plan to tackle driver behaviour and address duty of care.

3D Coverage

“Creating a new dimension in fleet management”

Active Prevention Easier Fleet Management Competitive Cover

3D Coverage

Competitive Cover

• Flexible solutions
• Fully Insured fleet
• Own Damage Risk covered
• Third Party Liability covered

Competitive Cover

Cover provided by the relevant experts in each area, creating an enhanced solution for you and your drivers

LPUK Vehicles Other Funders’ Vehicles Daily Rental / LPF Demo / Courtesy Ancillary Equipment Third Party Liability

✓ ✓ ✓ ✓ ✓

Own Damage

✓ ✓ ✓ ✓ ✓

Total Loss

✓ ✓ ✓ ✓ ✓

End of Contract

✓    

Claims & Repair Management

✓ ✓ ✓ ✓ ✓

Allianz

✓

LPUK

✓

No cover



Active Prevention

• Increasing driver safety through prevention programmes
• Active management involvement
• Comprehensive driver reporting
• Consultancy approach
• RiskAWARE
• Long-term view
• Lowering the total cost of insurance

* Data from Drivetech has shown the effect of on-road coaching to high risk drivers dropped from 1.3 collisions per drivers to 0.3 collisions, a significant reduction of 77%.

77%

Reduction in collisions*

Easier Fleet Management

• One monthly invoice together with lease
• Costs automatically allocated at the point of invoice
• Vehicle immediately covered on delivery
• Comprehensive reporting
• Accident management
• One contact number / mobile app
• Rapid declaration of total loss (lease terminated accordingly)
• Fast, efficient preferred network of body repair shops
• Courtesy collection, delivery and car wash
• And we take over the management of MID

Management time savings – Cars

3D Coverage LP Accident Management External

Incident Management Repair Management Incident Management Repair Management Incident Management Repair Management Administration time

28% 22%

quicker quicker

Time to complete Administration time Time to complete Administration time Time to complete

Savings generated – Cars

3D Coverage LP Accident Management External

£291 £362 £489

Rental cost at £20 per day and lease cost of £373.75 per

• month. Incident types where additional costs can not be

recovered*

*Driver fault (undriveable), total losses, theft and damage. This is based on replacement vehicle costs and recovery of lease rentals on total losses

41

%

saving

26%

saving

Management time savings – Vans

3D Coverage LP Accident Management External

Incident Management Repair Management Incident Management Repair Management Incident Management Repair Management Administration time Time to complete Administration time Time to complete Administration time Time to complete

22% 16%

quicker quicker

Savings generated – Vans

3D Coverage LP Accident Management External

£412 £495 £635

Rental cost at £22 per day and lease costs of £370.46 per

• month. Incident types where additional costs can not be

recovered*

*Driver fault (undriveable), total losses, theft and damage. This is based on replacement vehicle costs and recovery of lease rentals on total losses

35%

saving

22%

saving

Covered until the end…

With 3D Coverage we get to know your fleet inside-out, meaning we view the end of your contract a little differently:

• Our aim is to remove ALL end of contract damage invoices
• We simply expect what we delivered on the vehicle to be returned and the

vehicle to be mechanically sound, so these costs are not included in the cover

• We will do this by providing automatic cover for 90% of

invoices

• Based on historic performance
• We will use Active Prevention to jointly stop the remaining

terminations reaching the cover threshold

• This means we have a joint goal to manage the fleet all the

way through the lease

As we manage all elements of the actual running of the vehicle we can provide rounded recommendations on how to optimise the fleet and therefore provide a truly different approach:

• This solution should cover anything other than un-recorded

accident type damage

• And as we are covering this, on the rare occasion damage is

above your limit, we manage this as an accident through 3D.

• Costs are then recorded against 3D and you simply pay the

Administration Fee as you would on any other claim

How can we do that?

3D Coverage – What’s included?

3D Coverage – Standard Cover Optional Services

Third Party Liability Own Damage Incident Cover Own Damage Total Loss Cover End of Contract Glass

Covers repairing any damage to 3rd Party vehicle resulting from an incident. Covers repairing any damage to your vehicle resulting from an incident. In case it is not reasonable to repair vehicle, lease contract will be terminated without early termination charges Damage identified and agreed during vehicle return inspection will be covered by LeasePlan Glass replacement cost will be paid from Glass cover