Demystifying what’s happening in fleet

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The hot topic in the insurance world for customers and brokers at the moment revolves around motor fleet – the market is changing fast, and customers and insurers are facing many challenges with this class of business. We thought it would be useful to do a run down with Aston Lark’s own motor specialist…

Penelope Chalk spoke with Mike Bowditch, our Senior London Market Motor Broker, to pose some questions to help customers and brokers alike with motor fleet. Here’s Penelope and Mike’s interview:

Tell us what is involved with motor fleet broking?

Broking in general is about knowing your markets and using your relationships and technical knowledge to get the best deal. As specialist fleet brokers, we collate all the information from the executive who’s known to the customer, covering areas like an “Insurance presentation outlining your insurance needs”, “Insurance schedules”, and “Your claims information”. We then summarise this for the benefit of selected specialist underwriters. The more high-quality information we can present, the better. And having a full story about the risk and how its managed is fundamental to getting the best premium and the widest cover.

Insurers should always want to underwrite insurance risks; we find that the story we present them with, and the level of information,  helps them to do this the best way possible.

So why might one use London Markets for fleet for example?

Like many specialist risks, London Markets have the capability to insure anything, so that means nothing is off the table.

The London Market is filled with some of the best technical and trading underwriters in the world. This means that no matter the risk, there are experts who understand the risk and price it accordingly. We have regular appointments with our markets so when executives are finding it difficult to place cover due to timescales, claims history, premium targets, or the nature of the risk, the London Market comes into its own.

Why do you think motor fleet is seeing so much change and challenge this year?

This is due to several factors – claims inflation, reinsurance prices, accessibility of parts, and the hangover of COVID. Put these all together and, honestly, the picture for motor fleet does not look too great at this present time.

Government initiatives are also trying to backfill a shortfall in HGV drivers. This means there are younger or inexperienced drivers taking the driving seat. However, at present we cannot confirm any correlation between less experienced drivers and higher or more severe claims. But we recognise uncertainty does not often yield good results from underwriters whose job it is to predict and price risk.

Rewind to 2019 when insurers wanted to underwrite risks for profitably. Then, the fallout from COVID pushed the claims to become lower in frequency. However, the severity of claims increased which changed the underwriting dynamic.

Currently insurers want to underwrite more for premium and the insurers are suffering a hangover from cheaper underwriting for heavier risks during the pandemic, while lots of vehicles were off the road. And during this whole time, the severity of the claims increased. As more drivers have returned to the road, the frequency of claims has caught up, and severity and costs remain high.

How can customers get the most from their fleet brokers?

By collaborating with them and heeding their brokers advice. I understand price is a major factor, especially in the current economic climate, but insurance policies are there when you need them most and other factors need to be considered. For example, questions that need to be answered include: How robust is their claims service? Is there any risk management support available? How restrictive is the policy? How flexible is the insurer? You will have claims on a fleet policy, so you need to know you are with an insurer who’ll look after you and pair you with a policy that performs as you would expect.

If you’d like to understand more about how we can support your fleet, contact our team today using the button below.