By Paul Trafford, Associate Director, Griffiths & Armour
As a Transport industry and motor fleet insurance professional working for one of the UK’s most reputable independent Insurance Brokers, I take great pride in taking ownership and control of my clients risk and insurance requirements by helping reduce their cost of risk and ultimately giving them the protection they need to achieve their business objectives.
It might therefore surprise you that, in certain situations, I believe getting your broker involved in an insurance matter may actually be a negative thing and cost you unnecessarily!
Let me explain...
I have heard of many insurance broker’s advocating reporting motor fleet claims direct to them. All sounds good so far, right? Not always! You may see this as adding value to your business because the broker is providing another service initially, but unless the broker is proactively chasing down the third party you have had the motor accident with, those critical early minutes and hours after an accident may mean the broker’s intervention is actually getting in the way. Any delay in dealing directly with the third party could eventually result in higher costs associated with the claim and therefore eventually cost you in higher premiums.
When underwriters are looking at a risk, one of many factor’s they are looking at is the fleets’ loss ratio or put simply, value of claims paid vs premium received from you.
My advice to all of my clients with a fleet of vehicles is that if you can focus on improving your loss ratio, you will see an instant improvement in premiums. The most obvious way to improve this ratio is to invest in well risk managed procedures that improve the amount and severity of claims you have.
But did you know that the way in which you report motor accidents and claims can also make a significant impact?
When an accident / claim is reported direct to an insurer, they will immediately seek to contact (or ‘capture’) the third party, taking control of the claim by offering them exactly what they are entitled too, which can include a hire car if required and medical assistance. By doing so, it has a ‘win win’ impact for your business because the third party is cared for by your insurer, they are more likely to feel your business and brand is caring and therefore less likely to generate negative PR. Finally, by your insurer taking control, in most cases it prevents the third party getting into a credit hire agreement and potentially running up significant claims costs that your insurers have little control over.
A recent Aviva statistic stated that if a claim is reported more than 48 hours after the incident that the average claim cost increases by £3,000. If you are having a number of these incidents per year the cost to the business could be significant in increased premiums.
Here are my TOP 5 tips to help you review and improve your FNOL procedures;
- Talk to your broker about how they can help you improve your FNOL reporting procedures. If you don’t have a broker or considering changing, contact me using the e-mail below and I will be happy to explain how this can be improved.
- Choose an insurer that provides this service and in conjunction with your broker monitor how effective their claims service works. This will include analysing how effective the Insurer has been at contacting third party’s after an accident has occurred
- Brief your staff fully on the new claims procedures so they understand the benefits of reporting FNOL in the new way.
- Provide all drivers with bump cards for when an accident occurs, containing essential information like Claims Number and Policy Number (Insurers should provide this for you).
- Make sure you update the drivers hand book.
If you would like to discuss any of the points raised in this article of have any general risk management or insurance questions, please contact me anytime.
Paul Trafford, Griffiths & Armour Insurance brokers