Tell us about the genesis of Fleet Insurance; how did you define your niche in this marketplace?
Fleet Insurance was started in 2011 to support fleet owners who were seeking to achieve better commercial fleet insurance deals across the globe.
The reason to start this company was the realization that fleet owners pay way too much for their commercial fleet insurance. I saw this when I was managing director at an insurance company that specialized in insuring commercial fleets. Often seeing this, I thought I should start an insurance consultancy to work with the fleet owners to get them a better deal on insurance.
If you look at the global marketplace today, there are a lot of parties who do understand insurance and how that applies to fleets. However, what makes us unique is that we are independent and we approach everything not from a premium basis, but from an integrated benchmark basis. And in that domain we feel that we are unique.
Our role in the global commercial fleet insurance domain is basically to apply a methodology that allows us to source the best possible deal from all over the globe. What is unique is our approach. We look not only at the premium benchmark but at the total picture, and on the basis of that process we are able to guide the fleet owner in selecting the right solution for the right territory at the right price.
What are some of the ways Global Insurance adds value to the fleet client?
Now, the first thing we need to do when we are introduced to a client is to make an assessment of the client’s objectives. That is always the starting point and we have to understand whether or not we can add value to the current situation. What we are not very good at is working with clients who are purely procurement focused. There are negotiation skills that they can apply to get a better deal, but we feel that it can only be, at best, a short term. What we focus on is adding value for the long term. That means balancing the driver policy and the insurance policy. That is where we add our value.
At the moment, we focus exclusively on working with the fleet owners to achieve optimal insurance arrangements. We do that ourselves with our own consultants. In the process of achieving the total benefits it is the fleet owners who engage with other parties. It is our role to be solely advising the fleet owner. We have no commercial relationship with other ancillary providers. Our remuneration is paid by the fleet owner. We give them independent advice and to maintain that independency we don’t have commercial or other relationships with other ancillary providers.
What are some of the trends and issues you are seeing in the global fleet insurance market?
We are seeing an increase in risk management and an increase in cost of premium, basically driven by new regulations like the EU’s Solvency2 that require insurance companies to keep more capital and improve risk management procedures. As a result, there is a big risk for the fleet owners across the globe to be confronted with blanket premium increases across the board. Therefore, it is really important to, at this point in time, identify the fleet-specific risk profile and perform a comprehensive benchmark to achieve the premium that fits the specific situation of the fleet owner.
The main issue that fleet owners face is that the knowledge of commercial fleet insurance within their own companies is quite limited. They outsource this knowledge and purchase it from brokers and insurers. What these brokers and insurers provide is a very good coffer for the liabilities that a fleet owner faces. However, what they don’t provide is benchmark data, not only in premiums but also claims that are incurred. Furthermore, there is no standard practice of analyzing in detail the risk profile of the company. As a result, the premium that the fleet owners are being charged reflects the general market rather than their specific needs and exposures.
Do you advise your clients on strategies they can use to reduce their fleet premiums?
In order to reduce fleet premiums there are basically two big pillars that need to be balanced. First of all, the fleet driver policy needs to be very clear. Some companies sometimes opt to have a “happy driver policy” and that doesn’t go very well with lower premiums. The second part is the insurance risk policy that determines the type of risk position the company wants to take. Are they willing to take on board the risk themselves on their own books, or do they want to transfer the risk to an insurance company? In the process of going through that strategic decision, we provide advice and guidance.
Do you guide them on putting together their driver policy?
Driver policy — that is not something that we specialize in; we take that as a given. What we do is we add the missing link between the driver policy and the insurance policy. We bring them together because we really believe they have to work hand in hand in order to achieve the optimal insurance arrangements.
What is the fleet size that you work with?
When I started out I felt that probably the smaller fleet owners would benefit most from these type of consulting services, but in the end – after two and a half years now – the client base varies from 500 vehicles to 250,000 vehicles and the needs of the fleet owners vary across the whole globe.
Is there anywhere that you don’t work?
At the present, we have not had experience in Africa and South America. These are territories that are still in development. The consulting service we provide depends on competition among potential suppliers. The biggest fleets are concentrated in America and in Europe and that is where we focus. That is where we have the data, the benchmarks and our expertise to support fleet owners to achieve this maximum deal.
