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• Rising fuel costs and insurance premiums are making driver training a win-win for company car fleets.
• It is important to assess and manage driver risk and then decide who will benefit most from what sort of training.
• It needs to be sold as a benefit to drivers, cutting the cost of their private motoring.
• Telematics can have a role to play, but ‘Big Brother’ worries must be addressed.
• Training will need to be repeated regularly.
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Case study: Hannaford cuts down on car insurance claims
St Albans-based fit-out and refurbishment firm Hannaford has seen its insurance claims and premiums drop sharply since implementing a comprehensive driver training programme for its 51 employees in 2008.
Fleet manager Leigh Stiff says: “We only had five claims last year and the same the year before. Before we started this programme, it was a bit of a free-for-all. The number of claims was not being measured or managed, and our insurance costs were creeping up.”
All staff complete an online risk assessment, with those judged to be high risk, plus all employees aged under 25, being given on-road training with training company Peak Performance. Other staff attend classroom-based training.
“It ticks the box in terms of duty of care, but it is something you need to keep doing,” says Stiff. “You have to keep drilling it into people. It is not just fuel or insurance, it can be little things, such as explaining the importance of reporting a chip or crack in the windscreen so we can get it seen to earlier.
“With fuel prices, it is just another way of trying to ensure we are not being held to ransom. If you are managing to lower costs, you are ahead of things.”
Stiff adds that the process is also about educating drivers on issues such as fuel efficiency. For example, if they find themselves with no option but to fill up at a motorway service station, they put a small amount in, perhaps £10, and fill up somewhere else more cheaply. “You cannot know what is going to happen on fuel prices, so it is important to manage costs as best you can.
“We also now make a point of examining whether a journey is even necessary,” Stiff explains.
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With fleet costs soaring, driver training may be the best route to save money, says Nic Paton
Chancellor George Osborne's 1p cut in fuel duty in the March Budget was a little good news for company fleets, but does not change the bigger picture of soaring fuel costs.
Oil prices have risen by 60% since July 2010, with the waves of unrest in the Middle East not helping nervousness in the markets. The AA's monthly Fuel Price Report estimated in March that average UK petrol and diesel prices had risen by up to 5p a litre in the previous month alone.
Also in March, the European Court of Justice ruled that insurers will no longer be able to charge different premiums to men and women, which is set to drive up premiums from December next year, possibly sooner.
Investing in greener, more fuel-efficient cars can help keep fleet costs down, but one key way to tackle these challenges is through driver training, both to improve miles-per-gallon and to reduce accidents and insurance claims, and therefore premiums.
Nigel Trotman, head of strategic consultancy at leasing company Alphabet, says: "Fuel rates at the moment are probably top of the list for discussion when it comes to fleet operations. The debate is centred around what [organisations] can do to reduce costs when buying fuel and what they can do to ensure drivers are using fuel better. Driver training is a key tool in this."
No Jeremy Clarksons here
But what driver training is not, or should not be, is sending all employees off to pretend to be Jeremy Clarkson on a race track for a day, says Diarmuid Fahy, head of risk at ING Car Lease. Instead, employers should start by assessing who their high-, mediumand low-risk drivers are. "A lot of drivers are perfectly fine and most get from A to B without any problems," he says. "But there will always be some who are higher risk. It could be they are rubbish drivers or, more likely, because they are doing high mileage, particularly if they are doing high mileage in a city or urban environment."
It may be that loweror medium-risk drivers will benefit simply from an online or classroom-based package. Many realistic simulation-style products are available, with the more intensive training being targeted at higher-risk drivers.
On average, employers will probably be looking at about 23% of their drivers needing training, whether because their miles-per-gallon is too low or because they run up a very high mileage, says Paul Jackson, managing director of fuel and mileage management specialist TMC.
Even then, training may not mean large amounts of time out of the office. The Energy Saving Trust, for example, offers company car drivers 50-minute training sessions that, it calculates, can reduce fuel bills by £200 to £300 for someone covering 12,000 miles a year.
Programme produces immediate benefits
ING Car Lease's 60 staff went through just such a programme this year, with the firm seeing immediate benefits, says Fahy. "The employee drives a designated route, then the instructor drives it, then they drive it together and assess the difference," says Fahy. "In every single case there was a 12-15% decrease in fuel consumption, and one person even used 24% more on their route, so it really can make a difference.
"It will normally be fairly obvious things: not braking too hard, not coming to a complete halt if you can avoid it, not accelerating too hard and not driving too fast. Inertia is also the enemy here as some drivers will not really buy into it or be willing to change their behaviour. There can also be a relapse where they revert to how they were, so it is something [employers] need to keep on doing."
An education process is needed both before and during the assessment process. In this, employers should explain it is not about catching out or penalising drivers, but about something being done for their benefit as well as the organisation's, and which could reduce the cost of their personal motoring. John Lewis, chief executive of the British Vehicle Rental and Leasing Association, says: "The organisation does need to justify it internally; it is not just an issue of duty of care. It should reduce accidents but also it should enhance driver behaviour, which should filter through into lower fuel consumption and lower maintenance costs, such as wear and tear on tyres, and journey planning and management, even whether a journey needs to be made."
When it comes to insurance premiums, driver training is something insurers are on the lookout for. Ross Wilkes of insurance broker Coversure, says: "Insurance premiums are going up across the board, whether for fleets or private drivers. Evidence of risk management and driver training is becoming more important. Insurers will take more notice of these things and if there are fewer claims as a result, this will push down premiums."
It may even be that an insurer is happy to make a contribution to the cost of driver training, so it is worth at least asking the question, says ING's Fahy.
Telematic black box systems, which monitor driver behaviour and help evaluate risk, could become an important
tool, particularly when employers want to drive down insurance premiums. "Once drivers accept there are benefits to being monitored as they drive, that is one of the biggest hurdles overcome," says Alphabet's Trotman. "But employers do need to explain it is not 'Big Brother' but about helping them to manage their risk and helping them to bring their costs down."
Employers must also recognise that training has to be offered or repeated regularly. "Driver trainers say that, typically, drivers will retain one thing from a training session, so you do need to keep on doing it and refreshing it," says Trotman.
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