Analyses
18 fév 15

Risk management can still save you a lot of money

No more than 20% of Belgian companies prospected for Aon's 'Fleet Risk Management Survey 2015' indicated they thought that restricting or forbidding the use of mobile phones while driving was a priority. That attitude exemplifies much of the thinking in the fleet sector around risk management: it is often reduced to providing a safe vehicle, neglecting a more holistic approach. Fortunately, there is a bright side, as that leaves a great deal of room for safety optimisation, through risk management guidelines for drivers.

Insurance broker Aon, which manages accident files for 54,000 company cars – 10% of Belgium's corporate fleet - was startled by the findings of its survey of 128 companies (each with fleets between 5 and 500 vehicles), conducted in the final months of last year.

Follow-up
The results showed ample attention for the provision of airbags, ABS, ESP and other minimal safety equipment. But measures to promote safer driving behaviour, such as driver training or mapping of driver behaviour, was enacted only sparingly. Especially the follow-up of accidents leaves much to be desired: only 7% of employers surveyed takes an interest in the cause of the accident, and only 10% has a conversation with the drivers concerned. Only 8% of employers had a reward scheme for safe drivers in place.

The main causes of company car damages, as revealed by the survey, are: parking and maneuvering, hitting the vehicle ahead, or crashing into a stationary car. These are the leading causes both for the number of claims and the cost related to the damages caused. Setting aside freak weather occurrences like hailstorms, the main causes are invariably linked to driver behaviour. Implementing risk management measures would doubtlessly have a postive influence, translating into cost reductions for corporate fleets.

Very important
It is remarkable that about three quarters of those surveyed (fleet managers, financial directors and HR managers) consider risk management to be very (28%) or fairly (46%) important, but feel they don't have enough backing by top management – of which only 8% considers risk management to be very important (and 31% finds it fairly important). The perceived importance of risk management increases with fleet size, but the measures implemented are too often limited to providing cars with minimal safety equipment like ABS or airbags.

Preventive measures are only sparingly implemented. No more than 7% of respondents considered implementing risk management tools. Driving instructions and driving behaviour courses were a priority for only 8% and 5% of companies respectively. Over half of companies did not communicate at all on safety and risk management. Only 6% of companies had an active policy on this.

Stark contrast
Mobile phone use while driving – a controversial subject in public discourse – is not a priority at all. No less than 40% of companies have no guidelines whatsoever on the matter. In general, only fleets over 100 vehicles do. Aon's survey also reveals that less than 25% of companies assess the impact of their safety measures, with 18% using insurance data to do so, 12% reacting to changes in insurance policies, and 19% following up on changes in fuel usage. As for accident after care, barely 3% will have a talk with the driver, only 10% will map the accidents and no more than 7% will examine the causes of the accident.

All of which is in stark contrast to the general attitude towards risk management: 48% of respondents think risk management is the number one issue in fleet management. Its impact on cost is important to 29%, its effect on corporate reputation is relevant for 20%. And yet, only 22% think risk management will become more important.

Yawning gap
As Aon points out, the yawning gap between the huge theoretical importance accorded to risk management, and the poor implementation of safety measures in actual fleet management, is both a shock and an opportunity. It means that enterprising fleet managers can still significantly impact the safety record of their corporate fleets – and at the same time als reduce cost.

The interesting thing is that managing risk better doesn't need to be costly, difficult or time-consuming. A lot of measures can be implemented fairly easily. Prevention can take the shape of online courses and of better communication – both in the case of individual accidents, and around more general issues. They will be effective if their message is coherent, and they are repeated continuously. 

Authored by: Frank Jacobs