Arval UK has noticed a growth in the interest fleets show in fixed cost motor insurance, as new vehicle technology starts to increase premiums. A report from the Association of British Insurers states that claims repair costs in the first quarter of this year were £1.2 billion: the highest on record.
The report suggests that this rise is being fuelled by new technology such as ADAS devices and sophisticated headlights that are being fitted to new cars. These are more expensive to repair which, in turn, is starting to have an effect on premiums.
Ian Pearson, head of insurance at Arval UK, said the situation is having an impact even on fleets that employ advanced and successful risk management strategies.
“There are fleets that work very hard at controlling their risk and have improved safety and reduced their premiums as a result but even they can have little influence over repair costs. Of course, those fleets that already have a poor claims record are being even more adversely affected,” he said.
Pearson also added that the rising premiums have led to an increase in interest in fixed cost insurance products. “It does mean a shift from the normal fleet insurance mindset, but there are a whole range of advantages to securing cover in this way.”