Fleet Safety 5th Annual Ontario Universities Risk Management Workshop

1. November 26, 2003 Fleet Safety5th Annual Ontario Universities Risk Management Workshop Greg St. Croix Toronto, Ontario

2. DO YOU HAVE A RISK PLAN?

3. HOW ARE YOU PERCEIVED?

4. What is the greatest impediment to integrating environmental, health and safety into business?

5. “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

6. 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

7. 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

8. Does Fleet Size Matter? 2500+ 100 5 3 Key Factors: • Loss Cost Understanding • Realistic Goals & Targets • Effectiveness of Communication 15 500 50

9. 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

10. 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?

11. 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

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

13. 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?

14. 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.

15. 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

16. Loss Trend Analysis & Loss Control Loss Costs Loss Control Measures Loss Trend Analysis Today Loss trend analysis and loss control measures are worthwhile!

17. 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?

18. Tackling the BIG FOUR and More • Hit Others in Rear • Intersections • Pedestrians and Cyclists • Head-on Collisions • Rollover / Loss of Control • Jacknife

19. 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?

20. 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

21. 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

22. 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

23. Return on Investment (ROI) ($Benefits - $Costs) ÷ $Costs

24. 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

25. 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

26. 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!

27. Thank you! University of Guelph 5th Annual Ontario Universities Risk Management Workshop