Greg St. CroixToronto, Ontario

Fleet Safety5th Annual Ontario Universities Risk Management Workshop

November 26, 2003

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DO YOU HAVE A RISK PLAN?

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HOW ARE YOU PERCEIVED?

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What is the greatest impediment to integrating environmental, health

and safety into business?

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“The first duty of business is to survive, and the guiding principle of business economics is not the

maximization of profit - it is the avoidance of loss.”

- Peter Drucker

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Risk Management Test

1. You are implementing strategies now that will lower your Insurance Premiums and Total Cost of Risk

2. You have a Written Safety Policy and have adopted a continuous risk improvement program

3. You have determined your Critical Risk Factors and measure and review these on a regular, timely basis

4. You understand the Key Profiles your Insurers consider when reviewing your fleet

5. You have created a Strategic Plan to address identified exposures and risks

6. You routinely consider assuming more Risk

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Commercial Auto - The Facts

Quality and Loss Frequency are the best tools to work with, NOT your Rate Level or Loss Ratio

Loss Ratio does not necessarily equate with Risk Quality

Your Loss Ratio will deteriorate - plan on it!

Shock losses happen - prepare for them today!

Loss Frequency Control makes the difference

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Does Fleet Size Matter?

3 Key Factors:

Loss Cost Understanding

Realistic Goals & Targets

Effectiveness of Communication

515

50

100500

2500+

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Key Commercial Auto Risk Profiles

1. Managerial Expertise

2. Operational Knowledge

3. Commodities

4. Quality of Drivers

5. Equipment & Maintenance

6. Safety Management System

7. Loss Source Frequency & Severity Analysis

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Operations Loss Cost Test

What is our current Accident Record?

Is our record better or worse than previous periods?

Name 3 major sources or types of loss

Are our Insurance Premiums higher or lower than last year? Why?

Do we benchmark? How are these related to Safety and Risk Management?

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To Prevent a Potential Accident from Occurring, the Driver MUST...

be fully awake

be attentive to the traffic situation

have the necessary sensory acuity

be able to recognize the risk

perceive the risk as greater than the Driver is willing to accept

have the necessary decision-making skill for risk reduction

have the necessary vehicle control skill

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“If you can’t be a good example, then you’ll just have to serve as a horrible warning.”

- Catherine Aird

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Leadership Commitment Test

What would you rather be doing?

Are you working for the right company?

Do you personally plan to stay?

Do you have a mentor?

Do you mentor others?

Do you have a noticeable succession plan?

Do you embrace change?

Are you currently involved in professional development?

Do you champion professional development for your peers & associates?

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A Case for Regulatory Compliance

Fleets that do not record nor investigate crashes experience crash frequency 10% worse than the mean.

Fleets with an “unsatisfactory” safety rating have crash rates 46% higher than comparable fleets rated “conditional” or “satisfactory”.

Fleets that do not enforce maximum hours of service rules have crash frequencies 30% worse than the mean.

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Common Problems for Fleets

Hours of service, form and manner, training and follow-up at the Driver Level

Hours of service, lack of training, monitoring and audit at the Operational Level

Periodic vehicle maintenance records, lack of documentation (especially for Owner-Operators)

Driver hiring profile, lack of adherence to a program

Use of non-standard forms

Driver orientation training, inadequate and incomplete

Loss trend analysis, failure to perform

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Loss Trend Analysis & Loss Control

Loss Costs

Loss Control Measures

Today

Loss trend analysis and loss control measures are worthwhile!

Loss Trend Analysis

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What Really Matters?Approximate Reported Medical Cases in Canada, May 2003

4,560,000 Arthritis

2,400,000 Asthma

1,230,000 Diabetes

50 SARS

10 West Nile

How would you decide where to spend the $$$$$$$$$$?

Hint - What would you measure?

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Tackling the BIG FOUR and More

Hit Others in Rear

Intersections

Pedestrians and Cyclists

Head-on Collisions

Rollover / Loss of Control

Jacknife

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A Distinct Thought Process?

Can it happen?

What is exposed to harm or damage?

What is the frequency of endangerment?

What will be the consequences if it does happen?

How often can it happen?

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Prioritize - Utilize Resources Effectively

Some risks are more significant than others

Resources are always limited

Assume that staffing and money are seldom adequate to attend to all risks

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A Plan for Your Next Accident(5 minute response plan)

Set up credit facilities with towing companies

Establish an environmental response plan

Set up a system to quickly compile HOS

Establish a vehicle service record system with 5 minute access

Establish an emergency response policy to assist your drivers

Immediately dispatch a driver trainer and senior mechanic to the accident site

Ensure that personnel who might attend an accident scene have access to a camera

Establish a prior relationship and a response script with a public relations company

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Safety Costs Money…or does it?

STATE the problem (rising costs)

STATE the solution (your brilliant idea)

TELL them how you will achieve cost avoidance, expense reduction, revenue enhancement

DELIVER payback and ROI assumptions

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Return on Investment (ROI)

($Benefits - $Costs) ÷ $Costs

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Example($600,000 - $400,000) ÷ $400,000 = 0.5

Therefore, for every $1.00 invested in training, there is a 50% return in Net Benefit

ROI should be greater than 0 if economic goals are ultimately sought

ROI of less than 0 may be acceptable if your goals are non-economic in nature

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Goals for Safety/Risk Management Professionals

Eliminating or reducing risk to the greatest extent possible using available and limited resources

Contributing effectively to productivity, cost efficiency and quality management, in addition to safety

Active participants in achieving management goals

Our knowledge base is sound and the measures we propose to reduce risk produce results over time

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Maintain a Solid Career Base

Take care of yourself - physically and emotionally

Build a network of contacts and associations

Acquire basic financial knowledge

Be active in professional associations

Obtain professional credentials

Develop a solid professional knowledge and skill base

Be alert and prepared for career opportunities

Never stop learning!

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University of Guelph5th Annual Ontario Universities Risk Management Workshop