An overhaul of the use of technology and telematics in the rental sector could see savings of £5 million annually as motor trade insurance costs tumble, according to In-car Cleverness and Next Vehicle Rentals.
The companies predict that better driver behaviour, pushed by connected vehicles and telematics, coupled with a reduction in theft and fraud, will drive rental trade premiums down, while pre- and post-accident data will reduce liability disputes.
Adoption of the technology is already benefitting the rental sector, where fleet running costs and investment is vital to the overall health of businesses.
The fall in insurance costs for businesses adopting technology is due to the risk profile changing, and the rental sector – consisting of around 1,000 businesses – could save over £5 million, or £5,000 each annually.
In-car Cleverness says not every business has embraced the new tools at their disposal, however.
Paul O’Dowd, sales manager at In-car Cleverness, said: “Technology is a game changer for any business with a fleet of vehicles, but analysing the rental sector alone our customers are typically able to slash insurance costs by 20 per cent or more.
“Some businesses negotiate a substantial contribution to the cost of adopting the telematics technology itself, and so can benefit from a lot more than just cutting insurance bills.”
The rental sector is increasingly realising that if businesses know how vehicles are being driven, and customers know that is the case, accident rates tumble.
Rental firms and other businesses with fleets have also been benefiting from fewer cases of theft and fraud – as a result insurers are offering better rates.
Steven Cooke of Next Vehicle Rental said: “There’s no doubt insurers are taking notice of how telematics and technology can reduce risks. Insurers will review individual cases but savings are available when risks go down.
“Our insurance company actually contributed the cost of the roll-out of telematics across our fleet. They are actively supporting us to reduce vehicle theft and losses. As a result, its contribution amounted to an insurance saving of over 18%.”