Mercia Leverages AI to Cut Insurance Expenses by 25%
Mercia Leverages AI to Cut Insurance Expenses by 25%
Mercia Fleet Management has revealed a significant reduction in its insurance costs by leveraging AI-enhanced driver profiling and accident damage assessment, despite the wider rise in insurance premiums.

Mercia referenced an unspecified insurance comparison website, indicating that premiums have risen by 43% in the last year. However, Mercia has managed to decrease its insurance expenses by up to 25%.

This achievement was made possible through a collaboration with London-based broker Konsileo Commercial Insurance. By analysing data from a client’s fleet of 1,000 vehicles, Mercia, the fleet management division of EV salary sacrifice specialist Fleet Evolution, identified several best practice interventions essential for reducing insurance costs.

Some of the measures included driver profiling and remedial behaviour training, spatial awareness training for drivers involved in car park or kerbside incidents, licence checking, and vehicle risk management and assessment.

Given the high proportion of electric vehicles (EVs) within the fleet, Mercia also examined the impact of EVs on accident statistics. Findings revealed that EVs have a lower accident rate than internal combustion engine vehicles. Despite repair costs per EV being slightly higher, the overall repair expenses were lower due to fewer incidents.

The reduction in accidents is attributed to the advanced driver assistance systems (ADAS) found in most new EVs. These systems include lane departure warning, lane assist, automatic emergency braking, forward collision warning, parking assistance, and blind spot monitoring.

Andrew Leech, Head of Mercia Fleet Management, said: “We worked with Konsileo and adopted an innovative approach, looking at the analysis cost-by-cost, to identify the interventions that were most likely to impact the accident levels and repair costs on the fleet. High on the list of best practice interventions was AI-enhanced driver profiling using a traffic light and points-based system to identify the most at-risk drivers and to implement remedial training where appropriate.

“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. These interventions work for fleets of all sizes, and we would be happy to discuss with smaller clients how these processes and interventions can help them reduce the cost of their insurance premiums,” Leech added.

Source: Motor Finance Online

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