Small Business Fleet Insurance – Brexit Questions

We’re already receiving some questions about what Brexit will mean for fleet insurance. So, we’ve decided to put a few thoughts together here.

Do please remember though that we at Alan Blunden Insurance Brokers are experts in things such as small business fleet insurance. We don’t claim to be politicians or economic forecasters!

The current position

At the time of writing, the UK government has just commenced Brexit negotiations with the EU.

This is a process that could easily last another 24 months and might, by process of mutually agreed extension, last even longer. The direct answer then is we don’t know what final Brexit deal will be agreed and right now, it seems unlikely anybody else in Brussels or Westminster does either.

That inevitably means that our direct answer to the question is once again – “we don’t know”.

No direct impact

Many aspects of Brexit don’t, at face value, appear to have much to do with vehicle insurance. As such, our excellent small business fleet insurance products won’t be directly affected by the potentially controversial debates between the EU and UK on subjects such as immigration, the primacy of courts, expat rights and so on.

The by-product economic issues

It’s also doubtful whether vehicle insurance will ever be a direct subject for discussion at the highest political levels.

Any suggestion that UK registered fleet vehicles won’t be able to obtain insurance cover for journeys in the EU seems impossible to believe. Already in the EU today it’s possible to see vehicles from many countries that are not member states including Switzerland, Russia, Ukraine and Norway openly driving on the roads.

So, that looks to be a non-issue and no cause for concern.

It is though conceivable that commercial fleet insurance might be indirectly influenced by the broad background economic debates and particularly the “free-market”.

Whenever trade deals are being negotiated, there is always an imperative for both sides to play hardball to try and get the best deal they can. In almost all cases, common sense prevails and a compromise is reached. However, it’s just about conceivable that if trade talks collapse and a tit-for-tat series of sanctions and penalties are imposed, then indirectly that might affect UK insurance premiums for vehicles travelling into the EU.

It might also affect wholesale insurance costs on the London markets.

Probabilities

This though seems highly improbable. The EU and UK economies are just too important to each other for either side to put the vast trading sums at risk by being unrealistic and starting a trade war.

The idea that German and French vehicle manufacturers will happily accept not being able to sell their cars in the UK or that Scottish Whisky producers will gladly write-off their exports to the EU, seems inconceivable. There are literally hundreds of other such examples too.

So, on balance, the most likely outcome in the arena of trade (and indirectly, small business fleet insurance) is one of little direct change.

Prognosis

True, we still have a long way to go and things can change dramatically. Uncertainty can arise from almost nowhere, as in the case of the recent UK General Election.

We, like everyone else, will be watching events closely. We’ll share our views with you from time to time, as the situation evolves.

Why compare fleet insurance?

At the time of writing, the UK economy seems to be performing very well.

In fact, in 2016, our economy grew faster than that in any other major western economy apart from Germany – and that includes the USA.

Challenges remain

While there is plenty of good news around, many companies are still feeling the pinch. Margins remain tight and fleet managers have never been under greater pressure to deliver a cost-effective fleet solution for the business.

This is perhaps why, more than anything else, you need to be sure you compare fleet insurance models before making a commitment.

Not just cost

Sometimes the traditional knee-jerk reaction of some fleet managers is to take the scythe to costs on a ‘slash and burn’ basis. At times, that manifests itself in the domain of fleet insurance by simply looking around for the cheapest policy you can find.

While we at Alan Blunden Insurance Brokers will always work with our clients to find cost-effective solutions for fleet insurance, we’d typically never advise concentrating exclusively on finding the cheapest possible cover.

That’s because there are many dimensions to delivering the cover your fleet requires in order to deliver the optimum support to your wider organisation. Certainly cost should be high on your priority list but it’s far from the only thing to consider.

Why a broad-based comparison is required

When our clients speak of ‘policy cost’ they usually mean the premium payable.

That’s understandable but it’s in fact only one element of the direct and indirect costs that might be associated with a given policy. That’s why we look at the totality of your business and compare fleet insurance policies available in the marketplace for a good fit before working with you to home in on a preferred solution.

What other things might we typically be considering?

Well, they’ll include:

  • the excess on the policy – that’s the sum you’ll have to pay towards any future claims;
  • paradoxically, the excess again – because some policies might offer you the choice of opting for a higher voluntary excess and reward that with a lower premium;
  • the mileage assumptions – certain policies might base their initial quotation on annual mileage estimates that are just too low for your business’s practical purposes. If so, once you feed accurate figures in, the price might escalate rapidly;
  • restrictions on vehicle types – that might not be a problem for you today but it could be if you expand or diversify your fleet in future;
  • no-claims discount procedures and rates – self-explanatory but these things can make a significant difference to the amount you’ll end up paying over say a three-year period;
  • national versus international cover – again this might be important to you even if your operations today are restricted exclusively to the UK. You won’t want to see your policy costs rocketing if you start sending your vehicles into Europe in future.

Summary

The above things are just a few of the cost-related elements we’ll be examining on your behalf.

Looking around for fleet insurance that comes with the cheapest price tag is relatively easy. It’s not a skilled job.

However, finding one that’s right across a broad spectrum of your requirements is far more demanding and that’s where our skills and expertise might be essential if you’re to deliver a total fleet solution to your colleagues.

So, why not contact us now for a review of your fleet and your insurance needs? We’ll get right on it and identify a solution that will support you going forward.