Broker Urges Commercial Drivers to Aim for the 1% Club

Specialist fleet insurance broker, McCarron Coates, is urging commercial drivers not to push their claims into the 300% club by waiting more than 25 days to report them.  It says submitting a claim on day one can put them in the 1% club or better.

Leading insurers’ figures show a claim reported 25-30 days after it occurred, can easily cost more than four times the sum it would have cost, if reported on day one.  Some put the increase at 396%.[1]

Although the swift reporting message has been appropriate for some time, it has never been more relevant.  Claims inflation was at 17.4% even at the end of 2022, the highest for five years.  The average cost of a motor claim has soared from £4502 in 2019 to £6280 in 2022.[2]

As economies continue to face Covid-19 impacts, more cross-sector challenges have emerged, including labour shortages, rising energy prices and a scarcity of raw materials caused by the ongoing conflict in Ukraine.  

“ It is also true to say lingering labour backlogs may affect operations and increase costs, whilst the persistent pressure on energy prices can further strain budgets,” says McCarron Coates’ claims manager, Steve Stockley.  

“Raw materials shortages due to geopolitical tensions can lead to supply chain disruptions and inflated material costs.  Moreover, the repair and maintenance of electric vehicles can be costlier to manage than is the case with traditional internal combustion engine (ICE) vehicles, making it imperative for fleet managers to be vigilant in managing claim expenses.”

In this complex, challenging environment, McCarron Coates says fleet managers must prioritise efficient claims reporting and management.  By promptly reporting claims and taking proactive steps to control costs, operators can safeguard their financial stability and continue to navigate the current trying times with greater resilience.

“The clock is literally ticking from the moment a collision takes place,” says McCarron Coates’ director Ian McCarron, “and the impacts on the cost of a claim are palpable. The minute an insurer loses control of the claim to a third party, that third party can start adding in significant costs – car hire, medical treatment for injuries, inflated repair costs and the like.

“The more a company or individual can do to control the cost of their claim and keep things in their own insurer’s hands, the more they can exercise a positive influence on their renewal premium.  One practical and highly useful thing that anyone involved in an incident can do is to report the claim immediately.  It’s as simple as that.”

However, reporting a claim quickly often means getting hold of someone.  Those fleets required to contact an insurer call centre, or whose brokers have been absorbed into large centralised control centres, are literally paying the price, as caller response times were woeful even before the pandemic and working from home regimes and have worsened since.

Many trying to report a claim simply don’t have 45 minutes or an hour to wait on the end of a phone line, if on the road and able to move. Precious time is lost, simply because the claims reporting system is too slow, overloaded and unresponsive.

McCarron Coates does all it can to keep clients in the 1% clubs.  It has an in-house claims team, to ensure its customers were in the best possible position to control their claims costs and also get ongoing advice as to how to prevent claims from occurring in the first place. 

Avoiding the call centre route entirely, McCarron Coates’ clients have an App that enables quick information capture to move a claim forward, direct from the roadside where the incident occurred. The App has voice-to-text capacities, can collate photographs, gives a precise GPS location for the incident and guides the driver through every stage of in-situ claim submission.

Recognising some drivers struggle with technology or the English language, QR codes have been placed inside some clients’ vehicles, allowing drivers to simply scan the code to get a claim underway.

It’s all about encouraging day one reporting.  If a client can do this in around 80% of cases, the net average saving on premiums is around 18%.  However, the average of day one reporting through a call centre is around 30%, according to experts.[3]

“Nobody should be allowing claims to enter the 300% club,” says Ian McCarron, “and yet that club has an awful lot of members, due to post-incident stress, apathy, physical inability to get through to a call centre, poor administrative systems and many other reasons. 

“We have the claims team to keep the claim in our insurers’ hands from day one and the technology to help make that happen.  This is a huge advantage, as people are only human and can forget or underestimate the importance of acting swiftly.  

“In a time of huge claims inflation, allowing a claim to drift can lead to a very nasty shock at renewal, when insurers seek to recoup the losses they had not factored in, caused solely by late reporting.”

To find out more about McCarron Coates’ approach to claims, visit www.mccarroncoates.com or call 0113 298 3489.                                                                                        

Notes to Editors.

[1] Insurer Allianz has produced the following data with regard to late reporting, which relates to a simple RTA scenario where an Insured driver hits the rear of a stationary Third Party (TP) vehicle with moderate damage caused. The third party was driving an S3 rated ABI vehicle (i.e. Ford Focus) and its driver sustained whiplash.

Notified on

Estimated Repair outcome 

Estimated Hire Outcome

Estimated Personal Injury (PI) Settlement

Total Cost

% Increase on Report Delay

Day 1

£1,500

£500

£3,000

£5,000

0%

Day 5

£1,800

£1,700

£4,000

£7,500

50%

Day 15

£2,600

£2,400

£6,500

£11,500

53.3%

Day 30

£4,000

£7,500

£8,500

£20,000

73.9%

*The figures produced in this table are illustrative based on assumptions triggered by delayed reporting which takes into account increased risk of credit facilities, loss of MoJ portal status, and escalation to more aggressive lawyer teams that build damages.

Meanwhile, QBE has produced the following. Here, the context was similar but the vehicle was a P5-rated ABI hire vehicle (BMW 520).

Notified on

Estimated Repair outcome 

Estimated Hire Outcome

Estimated Personal Injury (PI) Settlement

Total Cost

% Increase on Report Delay

Day 1

£7,127

£0

£0

£7,127

0.0%

Day 7

£8,845

£4,285

£900

£14,030

96.9%

Day 15

£8,845

£6,042

£4,070

£18,956

166.0%

Day 25

£8,845

£22,204

£3,830

£34,879

389.4%

*TQBE Insurance - he figures produced in this table are illustrative based on assumptions triggered by delayed reporting which takes into account increased risk of credit facilities, loss of MoJ portal status, and escalation to more aggressive lawyer teams that build damages.

[2] Average claims costs: 

2019

2020

2021

2022

Average cost per claim (gross)*

£4,502

£5,037

£5,349

£6,280

% Change - All motor claims

9.80%

11.90%

6.20%

17.40%

*Source: WTW Claim Metrics. Figures based on settled claims over £150 and capped at £100k. *Exc. Windscreen claims.

[3] Source = Insure Apps (insureapps.co.uk) 

Ends

Editors notes

McCarron Coates is an award-winning insurance broker, based in Morley, Leeds, which is a specialist in fleet transport insurance, as well as supplying many other types of commercial insurance policies and risk management services.