When procurement professionals don’t take ‘no’ for an answer, big results can happen
How procurement tricks-of-the-trade reduced this fleet’s total cost of risk
When you’re a purchasing manager, finding excellent vendors and negotiating pricing and contracts are among your strongest skills. For one thing, you know how to leverage suppliers against each other to reach ideal prices and terms. When done well, you’ll see which of your suppliers are self-serving and which are customer-centric. In fact, this strategy helped one purchasing manager strengthen suppliers, integrate data and reduce the cost of their commercial auto policy by more than 15 percent.
A manufacturer with 300 vehicles had previously approached their insurance broker to see if their telematics devices qualified them for discounts. Sadly, they were told ‘no.’ In the past, it was rare that an insurance company would give a price break to a fleet that was leveraging telematics. Even though the devices were providing valuable information about driver safety and compliance, neither the purchasing manager nor the insurance broker alone had the resources to prove the correlation at the time.
Trusting her instincts that safety training and telematics technology combine to drive down risk, the purchasing manager decided to try again. She met with her ARI rep at the end of 2018 and shared her plans to contact the broker again. She intended to ask if participating in ARI’s safety and Geotab telematics programs would yield any rate discounts. Her rep recommended leveraging the competencies of Holman Risk Partners, which specializes in commercial insurance. He knew of other fleets that were successful in reducing their Total Cost of Risk by working with them.
ARI’s telematics program monitors driver performance to identify risky drivers. Coupling this data with ARI’s safety program, which actively assigns training to drivers to correct behavior, is helping organizations prevent fleet insurance claims. Notably, when a company allows Holman Risk Partners to present a case to their insurance broker for ARI’s integrated safety program and telematics solution, the insurance carrier may then lower their commercial auto insurance premiums.
The purchasing manager agreed to talk with a Holman Risk Partners rep to share more details into her business needs. Understanding the purchasing manager’s position, Holman Risk Partners looped in pre-screened insurance partners. These are carriers who understand the value of ARI’s products, specifically how telematics technology feeds ARI’s fleet management tools:
Driver Training Modules
Safety Policy & Testing
In late 2018, the customer subscribed to ARI’s safety program. They also transitioned to ARI’s Geotab telematics program. Using ARI’s quarterly reports and the backing of Holman Risk Partners, the procurement manager can validate, to both her company and her insurance provider, how she’s implemented best practices to reduce the Total Cost of Risk.
- The company obtained new policies through Holman Risk Partners that reduced the cost of their commercial auto policy by 17.8 percent.
- Now with centralized safety, telematics and insurance, the company’s data is consolidated. Uniquely combined with dynamic analytics, the fleet team has proof in hand of the power of their cost avoidance strategies.
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