With so many fleet insurers leaping to their own defence I was almost lulled in to believing that the last six months have merely been a figment of my imagination.
However, let there be no misunderstanding here - heavy discounting has been present in the fleet market for several months. Several insurers have shown what appears to be an unhealthy appetite for premium income - whatever the cost.
Over this period my underwriters have grown increasingly frustrated at the deteriorating market conditions. Sensibly positioned quotes have been swiftly dispatched to the scrap heap as increasing competitive activity has forced premiums down.
In this climate it is all too tempting to surrender to market pressures and revise quotes downwards. Groupama remains firm in its views that where this leads to unsustainable prices being quoted, over time this will result in a no-win situation for all the parties involved - fleet operators, brokers and insurers alike.
I am proud of my underwriting team and I have absolutely no intention of asking them to compromise their professional approach to risk pricing. Without doubt this will mean that we will not capture or retain all the risks that we would like to have on our books, but it should also mean that I keep the cap securely fastened on our bottle of red ink.
I am sure we all accept that the actuarial process is not an exact science and that differing views of the value of a particular risk can exist.
I am intrigued, however, at the apparent existence of pricing models that appear to suggest that a premium below the historical average annual burning cost for a fleet risk is a sustainable proposition.
Genuine competition has always been a healthy feature of the fleet insurance market and is clearly a good thing from the consumer's perspective. Unfortunately history is littered with many episodes where competition has swiftly turned from a controlled exercise to uncontrolled mayhem with devastating results.
Sadly, in debates of this nature, it is all too easy to lose sight of the fact that the premium issue is merely one of the factors that should play a part in the buying decision. Service, particularly when it relates to claims, is as important as price if not, indeed, even more so. Equally I am sure that both fleet operators and fleet brokers would feel more comfortable with a greater degree of pricing stability than our roller coaster market tends to offer them.
I have no doubt that professional fleet brokers will take all these factors in to account when advising their customers of the merits of individual quotes.
Jack Brownhill
Director of motor
Groupama Insurances
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