Will 2024 bring short-term gain or lead to long-term pain when it comes to fleet insurance? Ashbourne Insurance’s Peter Smits assesses the landscape.

Ashbourne Insurance’s Peter Smits

Although we may be somewhere near approaching the peak of ‘hardening’ motor insurance premiums, industry experts are warning the insurance-buying public to brace themselves for further increases in 2024. It’s easy to see why – 2022 saw an annual rise of 19%, while half-year results for 2023 confirmed an increase of 21%.

While those increases in 2024 may not hit the heady heights of the previous two years, the trend is still upward. I understand the desire for anyone to reduce their insurance costs, particularly during the current economic climate – but it’s important to take stock of the situation.

There is no doubting that the perfect storm of Brexit, a global pandemic and the war in Ukraine has impacted on the cost and availability of parts and labour. That combination has resulted in not only a delay to returning any vehicle to being roadworthy, but also an impact on the premium paid.

Cheaper premiums can often prove too hard to resist – after all, one policy is just the same as any other and none of us ever plan to have any claims, right? The trouble is that a cheap premium will often result in a cheap service and/or onerous terms and conditions, not always immediately apparent.

Don’t get me wrong, I’m not advocating that you overpay for your insurance – and yes you should quite rightly demand a competitive solution. But here are some hints and tips to guarantee you the best and most competitive package, year-on-year.

First and foremost, select a broker that is truly independent – one that is free to search the whole market. Make them agree to a thorough market analysis and place all your trust in a single point of contact.

Brokers should be your advocate, who ‘sell’ the risk to underwriters to get them to compete for your business and making for the most competitive premium. Approaching multiple brokers at renewal could result in the same risk being presented to the same insurer from different sources. In our experience, this situation can result in some insurers refusing to quote, reducing the panel and, therefore, increasing the premium. Also be aware that underwriters want reassurances that any work they do could result in securing the business.

Don’t be too keen to jump-ship from insurer to insurer; continuity can help secure long-term savings. Just make sure your broker – while approaching a variety of insurance markets – always gives the holding insurer the chance to match any better rate. Like multiple presentations, most insurers won’t quote or provide their best rate if they can see three different insurers on cover in the past three years.

Be demanding of your broker. With a large fleet, they should be providing you with a quarterly update on claims and incidents. This information will help you identify any patterns for vehicles or drivers that you can act upon immediately – rather than getting a nasty surprise a week or two before renewal.

It’s also worth thinking about paying for small claims and glass damage yourself; the frequency of claims rather than the value of claims is what can turn an underwriter off pricing any risk. It is often said that one large claim can be written off as an exception, however frequent low-value claims can dictate a lack of care and attention.

Finally, don’t be averse to engaging a broker. Insurers reserve their best rates for brokers who can demonstrate good knowledge and longevity with the client. Fleet business can be labour-intensive and not many insurers would write this directly with the client. Ultimately, those with a long-term strategy who are prepared to work with a broker will see the benefit, not just in the levels of service but also the price you pay.