Major van fleets have begun citing risk rather than economy as incentives for investing in telematics, according to a specialist in the technology.

The managing director of Quartix, Andy Walters, claimed he had seen a recent but significant shift in businesses’ motivations for buying the systems, which had previously centred on economical concerns, such as improving fuel consumption.  

Speaking to What Van? he said: “Since the third quarter of last year we seem to be doing a huge amount with large fleets about safety and risk – much, much more so than, say, two years ago. For our fleet customers, up until now, all of that has been related to fuel economies, rather than risk reduction.”

He said the move was strongest among operators with bespoke vehicles, as such vans are difficult to replace short-term: “Obviously, there’s the concept of being a more responsible employer, but from an economic point of view, many of these companies have the vans fitted out specifically for them – it’s got refrigeration or it’s got racking – and it’s not possible just to go and hire a replacement vehicle when one has been in an accident. They have to have spare vehicles, which are fitted out in exactly the same way, so cutting accidents has a real economic benefit to them.”

Walters added that the prevalence of social media and a rise in the use of dash cams had led many businesses to become wary of the potential for bad press as a result of poor driving, causing companies to invest in telematics from a reputational perspective.  

“If a company has thousands of drivers and some of them are driving badly, then it’s not just the accident that’s the problem. Members of the public post information on the web, YouTube etc. about how employees are driving, and there’s much more evidence of it.

“I’ve done a few presentations recently where there have been 10 or 12 people in the room from all around the company, so not just the fleet manager; it’s the head of finance, the person who is liaising with their insurance company, and marketing and brand people who are really quite focused on that reputational aspect.”

Rising insurance costs for LCVs have also led businesses to invest in telematics to reduce accident rates and subsequently lower premiums.

“The cost of an insurance premium on a van is typically about the same as it is for a young driver,” said Walters. “A young driver’s insurance policy, even after a discount for having telematics fitted, will be about £1,500 – and a typical van will also be about £1,400 or £1,500. Larger companies that have thousands of vehicles will often self-insure, but even if they do their damage costs will be about £1,500 per vehicle, per year, anyway.”

Although telematics-based insurance policies are popular in the consumer young driver market, few, if any, direct equivalents exist in the corporate sector. However, some business insurers incorporate telematics data into premium considerations and offer discounts to companies that can prove they have cut accident rates.  

Walters said the practice had increased among large van fleets, although businesses were required to provide evidence if they were to receive lower premiums.

“If an insurance company is looking at a fleet customer and they’ve got 1,000 vehicles, the bottom line is that you have every risk imaginable under the sun – you’ll have every type of driver in there. So it’s not obvious immediately that, just by having telematics, you are going to improve the risk profile; it’s much more about managing the processes.

“If a company has, say, 500 or 1,000 vehicles and they’re broken down into supervisors, who may have 10 or 20 guys reporting to them, it’s much more about how those supervisors are using the tracking system for reducing risk, how they are monitoring drivers, and if they are giving their drivers feedback to make sure that behaviours change.

Insurance companies want to see that – the process of managing the managers.”