Case Study - Self Insured Fleets

Back Ground

SurePlan New Zealand (SPNZ) commenced trading in December 2003, providing 24/7 collision management services, launching our services with one of New Zealand's leading Fleet Management companies.

Prior to outsourcing service to SurePlan the client outlined in our case study was providing a basic accident management service. This service had a reliance on paper, in the form of paper claim forms and the operating software was limited in management and performance measurement. SurePlan were tasked with delivering a 24/7 service that would provide more than just accident assistance. The aim being to assist drivers in their time of need, provide direction, incident management, quality control and reducing the overall costs associated with an accident. In addition to the above our aim was to add value by offering claims management and risk management services.

Over the past four years we have continued to develop our people, systems and processes with a move towards a more sustainable platform. Our platform removes unwanted paperwork, cut administration time and has allowed us to effectively manage claims costs on behalf of our clients.

This case study will provide an overview of the benefits and cost savings gained through SurePlan. For the purpose of this case study we have chosen a self insured customer with a fleet size of over 600 vehicles.

The SPNZ Solution included

• Improved incident reporting and data collection processes to ensure the integrity of crash related data
• The effective management of accident costs, to reduce repair costs, downtime, and administration processes
• The management of third party claims, recoveries, settlements and disputes resolution
• To provide a ‘real time' fleet risk reporting system that would greatly improve the level of detailed insurance styled reporting that was currently being provided
• Over time introduce the framework that allows you to easily add strategies, when ready, which specifically target your ‘risky drivers'. This can be introduced once we have captured enough data.

Incident Reporting

Through a dedicated 0800 number and our 24/7 - 365 days collision assistance centre we created a user friendly process to capture vital information on each accident/incident reported.

The process for accident claims recording and administration is computerised with a uniquely scripted electronic claim form (ecf) which presents a logical sequence of questions, directed only according to the circumstances of the accident/incident.

The use of a telephony based system and FastTrack, SurePlan's collision and claims management
software, we can ask specific questions related to the accident/incident. This puts us in a position
where we can take immediate and appropriate action required.

• If repairs are required a repairer is booked immediately, sending out an electronic
  notification/booking to an approved repairer.
• If there is a third party claim, the claims process commences, establishing contact with the
  third party and gathering specific information to make a successful recovery or timely and
  fair settlement.

The benefits

Previous Process Client Managed	SPNZ – Incident Reporting Solution	Benefits Gained
Paper based claim forms	Claims/incidents are reported by phone	Time to lodge a claim is now on only 4:56 mins/secs (on average) We have removed the need for unwanted paper claim forms Specific details relevant to the incident/accident are captured, improving data quality We no longer have to decipher peoples handwriting
The distribution of incident details to those concerned was a manual process, the use of photo copies, scanned copies. Often the H&S person was not informed of an incident in a timely manner or at all	ECF’s are system generated and sent to nominated persons	Incident notification to persons responsible for: The health & safety of the driver/passengers – OSH requirements Asset management Claims/insurance & finance
Repairers were booked by phone, only during business hours, relaying details	Repairer appointment electronically	Clear instruction with specific damage description, contact details, vehicle details....etc Repairer bookings made at the time the incident is lodged, not the following day. Less room for error or delay. The ability to monitor repairer performance
	Outsourced solution	We have removed the internal administration of persons with the organisation of having to administer the claims and repair process

 

National Approved Repairer Network & Repairer Management

SurePlan has an established national repairer network, a group of independent repair businesses who we have pre-certified to meet our exacting standards for repair value, standards of facilities and service requirements.

Through the use of SurePlan's approved repairers and our web tool we are furnished with specific information about the repairs required and repair progress. The web tool links us electronically with our repair network and has compulsory actions, driving specific detail on costs of repair and the downtime of vehicle being off the road.

Required Actions

• Upload Invoice

Completed Actions

• Driver Call Control (04/11/2008)
• Car in for estimate (10/11/2008)
• Enter Estimate (10/11/2008)
• Car in shop for repairs (11/11/2008)
• Repairs commenced (13/11/2008)
• Repairs completed (13/11/2008)
• Client pickup or delivery to client (13/11/2008)
  

The above is an example of the repairer web application with a booking showing the specific action list and what has been completed and the actions still required.

Down Time Management and Cost Control

We understand the importance of having vehicles repaired and back on the road as quickly as possible, this reduces consequential losses associated with an incident i.e. lost productivity and replacement car costs.

SurePlan's Technical Services team are responsible for managing this process and work closely with our repairer network; by obtaining and assessing repair estimates (internally or externally) and providing authority for repairs as quickly as possible, with the following results:

• 65% of all repairs have been assessed and authorised within 24 hours of receipt of estimate
• 20% between 3 and 5 days, of receipt of estimate
• 15% greater than 5 working days (often due to parts availability, mainly on European vehicles)

When carrying out the assessing of repairs SurePlan take into consideration:

• the age and mileage of a vehicle
• the extent of the damage
• parts availability (new or second hand)
• the life expectancy of the vehicle on the fleet downtime

The following graph shows the average estimated cost of repair over the past four years, the average assessed and authorised cost of repair, against our benchmark.

Through assessing the cost of repair estimates we have saved on average 7% per repair.The
total cost saving over four years was over $94,000.

Repair Costs and Turn Around times

SurePlan monitor the performance of our repairer network identifying strengths and proactively monitoring any weakness in our repair network. For example

The average cost of repair - the size of job or extent of damage of repairs referred against the percentage of the labour, paint and parts component and the average repair time.

The average turnaround time across our network for this client is 5 days based on the average repair
cost being $2058.94.

Quality Control

SurePlan's quality control process has included repairer performance monitoring, onsite visits and the use of QC sheets (completed on every job).While we monitor some of the key performance aspects of our repairers, we believe the best feedback we can get is from our client's drivers. So in October 2008 we launched a short survey that is e-mailed out on the completion of a repair.

The Benefits

Previous Process Client Managed	SPNZ – Repairer Network Solution	Benefits Gained
There was a national network of repairers, however no agreed services levels or performance monitoring in place	National approved repairer network	A closely managed and established national repairer network A network selected to meet the service requirements of the fleet market. i.e. competitive rates, rapid turnaround times, quality repairs, pick up and deliveries....etc Innovative quality control tools
Paper based transfer of information or by phone	FastTrack web portal	Electronic transfer of repair data Compulsory fields driving a managed response, focusing on the progression of repairs Communications not limited to business hours, details can be sent and or updated as required Transparency, our clients can view repairer actions, estimates & Images, assessments and authorities Reduces the need for paper flow, 80% of all referrals to our approved repair network using our web portal
A two quote system and or the services of an external loss adjustor	In house desk assessing	We have technically skilled people looking at the specifics of each claim/vehicle and assessing the most cost effective repair method Downtime management Competitive repair costs The saving of $94,000 in repair costs over four years

 

Claims Management

The process for claims management starts as soon as a claim is reported. The SurePlan Claims team (which includes over 25 year’s claims experience) is sent as a brief description of every claim where the incident code indicates third party involvement. The success rate on recoverable claims is often dependent on quick action, it’s important we:

• establish contact with the third party quickly to determine insurance cover and confirm contact details
• gather both versions of events to try and determine liability and avoid disputes
• obtain any known witnesses details
• obtain police reports where police have attended an incident

The graph and table above show the gross claims costs on all claims where the third party has been deemed liable and the total costs recovered by SurePlan, each year.
SurePlan's third party claims recover rate has been very strong over the past four years and below we show that we have an average recovery rate of 85% of total claims costs, with 2005 and 2006 showing over a 90% recovery rate.

In 2006 our claims recovery rate was below our benchmark. This was due to three high cost claims, that
were deemed unrecoverable, one due to the third party being involved in criminal activities resulting in
imprisonment and two claims where the details captured at the scene of the incident were vague and
or false, the third parties have not been able to be traced.

Client Web Reporting & Risk Management

Online Reporting

SurePlan's online reporting system provides real-time incident/accident data. It has allowed our clients to drill down into individual claims, or look at all claims. This reporting system has meant our client can access the following, when they want or need it:

• All estimates, images and invoices associated with a individual file
• Financial data including total claims costs by cost centre, region, recovered costs, settlements, and provisional/reserves costs...etc
• Incident details including, incident type, location, date, time
• Driver details, gender, name and age
• Vehicle details and damage descriptions
• View report results on-line or download to Excel and get the raw data

Risk Management

Through our FastTrack system and electronic claim form we capture incident information which can identify areas of risk. New Zealand has some of the most stringent legislation around health and safety in the world, and motor fleet risk management is an important emerging issue for senior managers for a range of societal, business, legal and cost reasons.

For example we have chosen the most common incident type reported in this fleet

Incident type analysis - on average 19% of all incidents are hitting stationary objects

The following graph shows that Cost Centre 2 has the highest percentage of hit stationary object
claims in this fleet

The male drivers between the ages of 35 and 44 are most likely to be involved in a “Hit
stationary” object incident

Previous Process Client Managed	SPNZ – Claims & Risk Management	Benefits Gained
Claim Management not provided	Claims Management	A claims management solution for self insured fleets A claims team with over 25 years experience in claims management FastTrack system that drives a fast response to third party claims A very high third party claims recovery rate, over industry benchmark of 70% Detailed claims cost reporting and reserving
Basic reporting on the number of incident reported	On-Line reporting- SPNZ client Web reporting	SPNZ performance transparency, the aspects of a claim and the service provided available to view on line Accident/Incident data available in real time Access a flexible reporting tool, getting the information when you require it Information that allows you to identify area of risk within the fleet, and those drivers who could be consider at risk Our clients can focus their training budget on those drivers and areas of concern within the fleet We assist fleet in meeting their OSH requirements by tracking an incident and identifying hazards

 

The Future - Risk Management Strategies

SurePlan has developed a number of risk management tools aimed at increasing driver awareness and changing driver behaviour.

Research has shown that there is no one specific action; whether it is vehicle selection policy, safe driving commitment, driver training or driver incentives.....etc that reduces the incidents in a fleet. The most successful way has proven to be by employing a program that becomes a living system and incorporate a range of systems.

With this in mind SurePlan along with NZ Car Safety developed the DriveSmart program. DriveSmart first identify areas of risk within a fleet and then looks to put in place both pro-active and re-active services that focus on changing driver behaviour and creating awareness.

 

DriveSmart has 7 modules which form a safety circle or a living risk management system, all or some of these modules can be employed to replace or compliment your fleet safety program.

• Fleet risk audit & analysis - aimed at identifying the specific hazards/needs of an individual fleet
• The development of a safe driving policy - with specific hazards in mind
• Pre employment risk assessment program - identify potential high risk drivers prior to them driving a company vehicle
• Induction training - identify and manage risk training, e-learning tool is also available
• Collision and claim management services
• Fleet Protect - behavioural modification system that builds a driver profile based on reported incidents, infringements, excess fuel usage or tyre wear...etc
• Driver re-education for those driver who are identified as at risk

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