Dec 06/Jan 07

A telematics-based insurance package said to go further than previous initiatives has been launched by specialist insurance broker Lloyd Latchford. The company says it offers offer a deeper analysis of driver behaviour, and can therefore be more selective in calculating premium reductions.

The move comes as Cybit, which helped Norwich Union develop its established Fleet Telematics system, reports a sharp increase in interest in this type of product. During the three months to November, the company says it saw a 25 per cent increase in take-up of what it has now branded its Telematics Enabled Fleet Insurance (TEFI) offering

The new scheme from Lloyd Latchford is underwritten by two of Europe's largest insurers, Zurich and Royal & Sun Alliance, and has been developed jointly with telematics provider Airmax. It is said to be the first commercial fleet insurance scheme of its type in Europe.

Where it is said to differ from previous initiatives is in the fact that it takes account of more information. Airmax says it can build up a complete driver profile based factors such as rapid acceleration, harsh braking, overall mileage and speed, and infringements of the European Working Time Directive.

 

This is in addition to factors such as location, speed and time of day only, which are said to be used in other schemes.

According to Tim Hutton, commercial director of Lloyd Latchford: "By applying key performance indicators to driving style, the insurance industry can make vital risk management assessments on drivers and fleets. This allows us to set up incentive programmes which will reward safer driving fleets or É institute remedial training and premium penalties."

The company mentions possible savings of around 15 per cent in insurance premiums for users of the new system - a figure similar to that mentioned for the Norwich Union scheme, which is now supported by Masternaut as well as Cybit, and is expected to gain further support from the telematics field soon.

Cybit says the growing interest in its TEFI system may have been prompted by abrupt rises in vehicle insurance prices. The company cites analysis suggesting they could rise by as much as 40 per cent - a figure mentioned by Norwich Union itself. According to Kevin Sinclair, managing director of AA Insurance: "I expect other companies to follow Norwich Union's lead."

In Cybit's experience, the haulage and distribution sectors have been the quickest to take advantage of the new TEFI offering. It allows businesses with fleets to lock down insurance premiums for up to three years in the face of rises in insurance costs. TEFI also gives fleets the potential to earn a profit share of up to 16 per cent per annum, subject to meeting agreed claims experience targets.