Fleets to face higher premiums. (news).

NEW INFORMATION SUGGESTS that fleet motor insurance premiums could face significant upwards pressure in the coming months.

Three issues that could potentially impact premiums are:

1) The Fifth EU Insurance Directive This latest set of EU recommendations offers additional rights

For fleets, this means that any pedestrian or cyclist struck by a company car will automatically be covered under the fleet's insurance policy, regardless of where in the UK the accident occurs.

Not due to come into force until December 2004, the new legislation looks likely to impact premiums before this date due to the cost of implementation.

2) Uninsured drivers

On 14 February 2003, the scope of the liability of the Motor Insurers' Bureau was amended. This body is funded by the insurance industry to pay out compensation related to uninsured drivers.

The change means that anyone who has his or her property damaged by a stolen car is now entitled to compensation. This increase in claims costs is likely to hit insurers, meaning that premiums could be raised to compensate.

3) Bodyshop costs

In addition to the widely documented issues of falling recruitment and pressure to keep labour costs down, UK bodyshops are also facing increases in the costs of parts and paint.

To help fleets reduce insurance costs, fleet management company Arval PHH said it is vital to to analyse risk and manage incident costs.

Mike Waters, head of market analysis at Arval PHH, commented: "Accident management not only allows fleets to reduce incident costs, but by using the data to predict trends, they can improve their claims ratio and get lower premiums in the future. With all these new issues on the horizon, the importance of this cannot be overstressed."