Reducing fleet costs may seem impossible at the moment as businesses feel the pressure across multiple areas—including fuel, vehicle acquisition, maintenance and repair, and the rising costs of motor claims.

With fuel prices remaining high1, and motor claims costs continuing to rise2, it’s not an easy time for fleet managers. However, there are still ways to control cost, including encouraging changes in driver behaviour.

But while the price of fuel is beyond the control of a fleet manager, many of the other elements are interlinked, with scope to control costs through more effective and proactive risk management.

The rising cost of motor claims

In April, our article Claims inflation: Why are claims costs rising? highlighted that motor claims costs are rising largely due to supply chain issues driving up the cost of repairs, labour and parts. This is having a knock-on effect on the length of vehicle repair times, and is increasing the demand for courtesy vehicles in the meantime—for which insurers often have to foot the bill. Vehicle shortages can also mean that vehicles which would normally be written-off are being repaired, adding to these cost issues. Meanwhile, the shortage of second hand vehicles continues to push up their value, leading to an increase in vehicle thefts and subsequent claims.

All of this emphasises the need to manage risk more effectively to reduce the likelihood of claims.

Smarter driver behaviour as a risk management tool

Positive changes in driver behaviour can have the dual benefit of reducing risk and saving fuel. These simple changes can include shifting up to the highest appropriate gear as early as possible, avoiding driving at excessive speeds, and driving smoothly to anticipate situations ahead and avoid unnecessary braking and/or acceleration.

Telematics vehicle tracking systems have long been used to reduce risk and manage costs. But today, advances in technology mean that drivers can play a more proactive role, with real-time data at their fingertips, and valuable behavioural science added to the mix. While some data recorded will be beyond the control of the driver—such as location, vehicle load and road incline—some will be down to the individual behind the wheel, such as speed, revs, gear selection and harsh braking or cornering.

This where incentivising changes in driving behaviour can make a positive impact in terms of both safety and cost.

How Gallagher can help

Gallagher is committed to helping our fleet management clients reduce risk proactively, and where possible, manage costs.

One of the ways we are doing this is through our partnership with Lightfoot, a government-supported in-car technology designed to encourage safer, more efficient driving. The reward-based system incentivises drivers to stick to safe driving speeds and behaviours. This not only helps to drive down fuel costs and harmful emissions, it also helps to reduce the risk of accidents by up to 40%3 which, in turn, can help lower insurance premiums.

If you would like to know more about how this system works, or require any other advice or assistance with your fleet risk management, please get in touch.