Introduction:
Can data-driven insurance help gain a deep understanding of your fleet performance and find ways to optimise your business? Yes, it can.
That was our answer to VanUp - a delivery service partner for Amazon - who joined our Risk Management Academy with the goal of bringing their maintenance costs down.
Identifying the challenge:
Like many fleet delivery service businesses, VanUp’s key to success is providing timely service and ensuring their drivers are always on the road.
When client satisfaction is at stake - the drivers’ main priority is completing the jobs on time, of course. The problem is that often this leads to the drivers’ rushing the vehicles, increasing the risk of getting in an accident, and causing costly damage to the vehicles.
With VanUp, we found out that the drivers often wouldn’t report accidents when they did happen.
Our job was to help VanUp decrease the number of accidents and increase their drivers’ rate of reporting accidents. All with the aim to bring their maintenance costs down.
Our approach to the challenge:
Our Risk Management Academy provides insights on fleet performance, giving key action points to inform driver training, improve behaviours and make safer trips.
With VanUp joining our Risk Management Academy - one of our focus areas was helping the business and their drivers understand that, as an insurer, we are on their side and are interested in helping them become a more successful fleet business.
For many, insurance is a Pandora’s box: once you start asking questions, it just gets darker and more complicated. We believe that lack of insurance understanding is one of the obstacles sitting on the path to business’s success.
So, we were determined to tackle VanUp’s challenges in two stages:
- Explaining how insurance works, what metrics are important for fleets, and how fleets’ performance affect premiums;
- Generating transparent, easy to understand individual and collective insights on their fleet performance to consider in the action plan for improvement.
Insurance & driving behaviour 101
We sat down with the fleet management and explained some of the key elements of insurance and how the driving behaviour impacts the costs.
Firstly, the importance of immediate accident reporting. It’s simple: the longer you take to report, the more the third party costs increase.
Secondly, the drivers’ risk profile. The more claims the driver makes, the more high-risk they become - resulting in increasing overall fleet loss ratio.
Thirdly, the drivers’ behaviour: being gentle on the gas pad could cost the drivers’ only a few minutes. That’s a price worth paying, when you’re saving thousands of pounds for the business and most importantly, potentially saving lives.
Knowing the basics allows fleet managers to inform their communication with the drivers, ensuring that the drivers understand: cooperation actually helps reduce the costs for all parties.
“It has changed how I see risk works within insurance companies - if you can improve a driver’s behaviour, then you can reduce costs. If you can reduce costs then everything works in the right direction.
You can change people’s perspective on what they’re doing and how they’re doing it. They’re still hitting their targets, they’re still doing the work but they’ve improved. That to me is amazing. I never thought there was any way you could change the culture”,
- Peter Livings, Fleet Manager at VanUp Ltd commented.
Setting performance expectations
Our telematics technology enabled VanUp to see both the individual performance of their drivers, but also get an overall picture of how their fleet’s performance is changing.
Most importantly, having a clear picture of their fleet performance allowed them to set specific driver score expectations for their drivers. Similarly, the drivers gained a clear understanding of what driver score they should be aiming for and ways to get there. It’s a two-way street.
“If we can consistently hit 90s, that is what I am aiming for. But I have some drivers that are nearing 100 quite regularly.
Most in the 90s and then a couple in the 70s but if you look, they’ve actually improved a lot as the weeks have gone by. Drivers get back in touch to see if they’re doing ok”.
Better use of time
Setting up transparent and informative communication between the fleet managers and their drivers allowed VanUp to become more efficient with their time. Increased trust and cooperation gave them more time to focus on improving business instead of investigating vehicles for new unreported accidents.
“I used to go around the depots – at least twice a month previously. Check the condition of vans and speak to drivers so that they knew I was around and about. I would question why a driver’s tyres were worn out after a month and the van was dirty and not looked after.
We are seeing less damage on the vehicles and when drivers do damage a vehicle, they report it to us straight away which is even better”.
What VanUp achieved:
Outcome #1: Better drivers = lesser costs
Through setting a performance bar for the drivers and nurturing safer driving behaviours, VanUp saw significant maintenance cost cuts.
“The drivers are more economical by not racing around or braking harshly. Our maintenance costs have reduced as vans are not coming in as regularly.We’ve brought our insurance costs down by a third… and that’s actually because Zego has helped us help ourselves”.
Outcome #2: New processes established
Having a 360° view of the fleet performance enabled VanUp to set the processes needed to keep their drivers informed and the service provided high.
“I make a phone call to any drivers that fall below our expected performance. By actually talking to drivers, it helps them to improve. For anyone that’s really bad, I invite them back to the office to sit down and go through the reports.
These reports show me exactly who I need to highlight and speak to. It’s not just my view, it’s data, showing you information.
We got to the stage where the drivers were phoning us up each week to find out how they were doing, wanting to know if they’d got better. And they’ve improved. I never dreamed it would work”.
Outcome #3: Owning fleet data
We’ve enabled VanUp to really own their fleet data and use it in the way that’s beneficial to their business. We provide the data, and then it’s over to the courier to decide which information should inform their business decisions. The scope of data opens a door to potential business opportunities.
“I get rid of all the information I don’t want (left, right, turns, braking). I look at mileage to infer what type of work they’re doing i.e. motorways, local deliveries”.
The Ultimate Operational Results:
VanUp took full advantage of the fleet behaviour insights and achieved remarkable results against the posed challenges.
1. Claims Number*
Reduced by 70.5%. Meaning that the number of accidents and vehicle damages significantly dropped resulting in reduced claim numbers.
2. Average Reporting Delay*
Reduced by 69.4%. Meaning that the vehicles have significantly improved their speed of reporting accidents.
3. Claims Costs*
Reduced by 48.7%, which will positively impact VanUp’s insurance price at renewal.
*the results are valid for the month of June 2022
Wrapping it up:
Demystifying insurance mechanics and providing simple yet powerful behaviour insights empowered VanUp to make transformative changes, which not only made them financially more sustainable but also more effective on the operational level.
“I didn’t think risk management scoring would matter, I didn’t think you could change people or the way they are driving.
Zego has changed the way we think about insurance.If you get the right people that look after you, you stay with them. We encourage our drivers to go with Zego as it ticks all the boxes”.
Learn more about our behaviour based insurance and risk management here.