S A F E T Y F I R S T

B E C A U S E R E S U L T S C O U N T

Safety Hotline Program

Monitoring for “At-Risk” Drivers

Session Objectives

• Status of Highway Safety and Impact on Insurance Costs for Businesses

• Who Is SafetyFirst?

• How & Why Our Program Works

• Are we going in the same direction on parallel roads?

State of Highway Safety

• Assigned a Low Priority by USA – Allan Williams, IIHS, Status Report

• Despite crash rate improvements, miles are up – lots of death and injury activity

• Insurers are struggling with mounting financial impact

• Multitude of issues facing “Joe Driver”

State of Highway Safety

• Safety Advocates have a lot of good areas to focus on:– Road Design/Vehicle Crashworthiness– Enforcement of existing laws– Behavior Change in lieu of simple training– Graduated Licensing– Societal issues (cell phones, road rage, etc.)

State of Highway Safety• A ton of great work is being done by

various teams and organizations.– Insurance Carriers & IIHS– NHTSA & FMCSA– AAAFTS– NETS– Proprietary Safety Vendors– And more….

Who Is SafetyFirst?

• Transportation Safety Specialists

• Consulting with Insurance Carriers who cover commercial fleets

• Founded in 1996 with members who have many years experience

• Headquartered in NYC Metro Area

Our Mission Statement

Reduce the likelihood of commercial vehicle

collisions

Any method or practice that provides measurable, consistent, reproducible results

How?

Program Introduction

• Years of analyzing crashes have led to several conclusions:

– Most accidents could have been avoided

– Behaviors and Attitudes played a key role, not

skills…(training was not the issue)

We need a new approach to fleet safety that delivers meaningful results and is practical to implement

Driver Profiling?

• Motor Vehicle Reports have been used by insurers to profile drivers based on type of violations, accidents, age, etc.

• Predictive of continued poor performance, but based on history of existing behaviors (locking the door after the horse is stolen)

• 80% are “clear” of any past issues

“Clear” doesn’t mean “SAFE”

Direct Observations

• Too many drivers, too little time

• Perform differently while being observed

• How frequently is frequent enough?

• If you could prescreen who would benefit from this observation and narrow the field, then it might be more practical (ah, ha!)

Indirect Observations

• Electronic Black Boxes, GPS (We sell this equipment)

• Hardware costs can be prohibitive

• Like Hotline Services, Managers use exception reporting to locate extreme driving behaviors for coaching and counseling

The management team needs to care enough to read the reports, too!

Safety Hotline Service

• Decals placed on commercial vehicle

• Motorists report risk taking behaviors

• Reports generated & sent to fleet

• Drivers are coached on behavior

• Reports returned noting action taken

• Monthly reports distributed to client

Safety Hotline Service

• Flagrant behavior triggers calls

• Three calls per 100 vehicles per month on the average

• When calls are over 5/100/mo it is an indicator of serious problems

• Management is accountable to Insurer to investigate each report

Safety Hotline Service

• 80% of drivers NEVER get a complaint

• 10% get ONLY one complaint

• 10% get MULTIPLE complaints

• As long as reports are investigated with a real effort to coach and counsel drivers many crashes could be avoided

Six, independently conducted studies have been completed by insurers showing results

Program Impact Studies

• Hanover Insurance

• Fireman’s Fund Insurance

• Cornhill (UK)

• Great West Casualty

• John Deere Insurance

• Crum&Forster

Each carrier documented strong (20%+) reductions in frequency

Press Release, Transport Topics, P&C Online

Company News Magazine, Nationally distributed Associated Press Article 3/23/98COMPANY WEB SITE

VENDORWEB SITE

Personal Communication

VENDORWEB SITE

IIHS Partners Who Promote Hotline Programs

Bituminous Insurance CompaniesChubb Group of Insurance CompaniesChurch MutualFarmersGE Property & Casualty InsuranceHarleysville Insurance CompaniesThe HartfordKemper Insurance Companies

Liberty Mutual Insurance GroupMontgomery Insurance CompaniesOregon Mutual GroupRoyal & SunAllianceSAFECO Property & CasualtyThe St. Paul CompaniesZurich North America

Not all pay for the program, but recognize benefits to clients who participate in coaching drivers for improved performance

Other Providers Who Promote Hotline Programs

Financial Pacific Seaboard UnderwritersScottsdaleUtica NationalSelectivePMA GroupCrum & Forster Philadelphia Insurance

Thorson and Associates

Great West Casualty

Northland

CNA

AIG

Westfield

Acadia

Most will pay for the program, and recognize benefits to clients who participate in coaching drivers for improved performance

Safety Hotlines Save Millions

One insurance carrier studied the impact of SafetyFirst and three of our leading competitors

Conducted in October 2000, the study found that during the prior 12 month period, 117 fleets with 6957 vehicles experienced 546

fewer crashes than occurred in the previous year where no hotline program was in place.

Safety Hotlines Save Millions

One insurance carrier studied the impact of SafetyFirst and three of our leading competitors

“SafetyFirst saved us the largest amount of money, had the best return

of those services we use, and by far, had the most superior service”

These accidents were valued at $5,390,658.

After expenses, their calculated Return On Investment was 52:1

What Types of Vehicle Fleets?

Oil Jobbers, Delivery, Manufacturers, Taxis, Construction, Telecommunications, Healthcare services, Passenger transport, Truckers, Ambulances, Municipalities, …

Why the Program Works...

• The program singles out drivers who need the most help from management based on credible, timely reports of performance

• The program highlights specific risk taking behaviors that lead to costly crashes

• Coaching aids/tools are provided to endusers to help modify drivers’ behaviors

Drivers pay attention to their performance

Benefits to Underwriters?

Provides underwriter with scorecard on management’s willingness to address safety issues (do they coach, do they dismiss the reports, is there a lot of turnover, exceptions to hiring practices, etc.)

Many use our “drivers with repeat complaints” report to order mid-term updates on “at-risk” drivers.

Provides a dynamic update on exposure changes to the underwriter (highlighting changes in driver population, hiring standards, etc.)

Cost of Program?

$13 annually, per powered unit

$4 for each excess trailer

Far less than 1% of GPW per unit

Cost should not be a barrier to use the program

Why the Program Works...• The program singles out drivers who

need the most help from management• The program highlights specific risk

taking behaviors that lead to costly crashes

• Coaching aids/tools are provided to help modify drivers’ behaviors

Drivers pay attention to their performance

Hotline Benefits• Identifying unsafe drivers before they

jeopardize lives• Promoting job stability and security by helping

drivers become valuable employees, through effective coaching sessions

• Rewarding safe and courteous drivers• Sending a positive message of safety to the

general public

Are We Going In The Right Direction?

• Our communication effort has always been direct to the “commercial” side of the insurance carrier and to business managers at fleets

• Do motorists really understand our program or what to expect when they call us to provide details?

Would the public benefit from a better understanding of our program?

Are We Going In The Right Direction?

• Can SafetyFirst help IIHS in it’s efforts?

• Would IIHS Partners/Members want to know more about this type of program?

• Would more motorists be comfortable calling in if they understood the benefits?

Thank You For Your Interest

SafetyFirst and Insurance Providers Working Together to Improve Results for Everyone