How to deal with the lack of insured vehicles in Latam
Most of the vehicles in Latin America are uninsured, an alarming fact if you are a fleet manager needing to deal with traffic accidents and vehicle theft in the region.
“In Brazil, Mexico, and Colombia (the first, second, and fourth largest automobile markets in the region), no more than 30% of vehicles are insured,” says Alfredo Krueger (pictured left) who is Latin America VP for vehicle tracking and insurance telematics company LoJack.
Considering the size of these three markets, that leaves some 40 million vehicles in Brazil uninsured, 25mn in Mexico, and 5mn in Colombia, a lot of liability put on the hands of corporate fleet if something does go wrong.
For those who are insured, we can say that annual auto insurance sales in Brazil totals approximately US$6.9 billion, Mexico ($4.9bn), Argentina ($4.5bn), Chile ($1bn), and Colombia ($928mn), according to 2020 data reported by Mr. Krueger during his presentation at the last Fleet LatAm business networking group meeting on 2 May which kicked off Global Fleet Conference 2022 in Portugal.
When it comes to efficient fleet management, “insurance needs more attention and expertise,” says Yuliya Lapenkova (pictured right) who is Cost Category Spend Manager HR Services for health technology company Philips, a role which includes responsibilities for Fleet and Mobility. She too spoke at Global Fleet Conference 2022.
In Latin America, there are approximately 115,000 road fatalities each year. And for those non-fatal accidents, keep in mind that you are likely to be hit with much more than the cost of vehicle repairs and medical bills. Its common to see legal fees, replacement car rental cost, lost work productivity, and much more.
As for theft, nearly 150,000 vehicles are stolen in Brazil per year representing 37% of the Latam total. Mexico follows with 29% of the regional total, trailed by Argentina (7%), Colombia (6%), and Chile (5%).
For one, it is crucial for corporations to put driver and vehicle safety at top of mind. Include driver training in your safety policy, not only as a one-time deal but on an ongoing basis to keep your drivers on their toes.
Furthermore, insure your vehicles and take advantage of supporting technologies. Besides vehicle location and recovery services, fleet managers should implement telematics and other tools for crash analysis, driver behavior optimization, and other monitoring such as fuel control.
Finally, choose safe vehicles for your fleet, something that can be determined with the support of Latin NCAP, the Latin America and Caribbean regional car safety assessment program.
Overall, fleet and mobility managers as well as procurement experts should take the proactive approach of forecasting and mitigating risk ahead of time as opposed to the reactive approach of calculating and recovering from lost that has already happened.
With this, you will not only preserve the health and safety of your employees but reduce the ever so important total cost of ownership (TCO) of your vehicles.
For more insight on fleet and mobility in Latin America, come to Mexico City in September for Fleet LatAm Conference 2022. More info to follow shortly.
Top photo: vehicle on brink of disaster (copyright: Shutterstock)