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
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