Mercia Fleet Management Slashes Insurance Costs by 25% with AI

by | Jul 8, 2024

In an era where insurance premiums are skyrocketing, Mercia Fleet Management has bucked the trend by reducing its insurance costs by a remarkable 25%. I recently had the opportunity to sit down with Andrew Leech, the head of Mercia Fleet Management and founder of Fleet Evolution, to delve into how the company achieved this impressive feat through the use of AI-enhanced driver profiling and accident damage assessment.

Andrew’s enthusiasm for the project was palpable as he recounted the journey. “We were facing a real challenge with the rising insurance premiums,” he began. “An analysis from an insurance comparison website indicated that premiums had surged by 43% over the past year in the UK. We knew we had to innovate to counteract these trends.”

The company embarked on a collaborative effort with London-based broker Konsileo Commercial Insurance. By meticulously analyzing data from a fleet of 1,000 vehicles, they identified several best practices crucial for reducing insurance costs. Andrew explained, “One of the key measures we implemented was AI-enhanced driver profiling. This involved a traffic light and points-based system to identify the most at-risk drivers. Once identified, we could then provide remedial training to help them improve their driving behavior.”

This driver profiling was complemented by other interventions such as spatial awareness training for drivers involved in car park or kerbside incidents, regular license checking, and comprehensive vehicle risk management and assessment.

Given the high number of electric vehicles (EVs) in Mercia’s fleet, they also examined the impact of EVs on accident statistics. “Interestingly, we found that EVs had a lower accident rate compared to internal combustion engine (ICE) vehicles,” Andrew noted. “Although the repair costs per EV were slightly higher, the overall repair expenses were lower due to fewer incidents. This is largely thanks to the advanced driver assistance systems (ADAS) integrated into the latest EVs, which include features like lane departure warning, automatic emergency braking, and parking assistance.”

These advanced systems have made a significant difference in reducing accidents and, consequently, insurance claims. “By leveraging the data and these innovative technologies, we were able to make informed decisions that directly impacted our bottom line,” Andrew said with a sense of accomplishment. “The carefully selected interventions across the fleet led to us securing a 25% reduction in insurance premiums – at a time when insurance costs generally are on the increase.”

Andrew was keen to highlight that these interventions are not exclusive to large fleets. “These interventions work for fleets of all sizes,” he emphasized. “We would be happy to discuss with smaller clients how these processes and interventions can help them reduce the cost of their insurance premiums.”

As our conversation wrapped up, it was clear that Mercia Fleet Management’s success story is a testament to the power of innovation and data-driven decision-making. In a challenging insurance market, their proactive approach has not only safeguarded their financial health but also set a benchmark for others in the industry.

Mohammed Ahmed