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Article | Managing Risk

How can good fleet risk management be recognised?

Risk & Analytics|Corporate Risk Tools and Technology|Risk Management Consulting
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By Andrew Millinship | April 15, 2021

Effective fleet risk management can be recognised by accreditation. This article explores the benefits.

Effective fleet risk management documents and demonstrates a vital commitment to a duty of care in ensuring all at work activities are undertaken appropriately, keeping all employees safe, reducing administrative burden and cost as a result of fewer incidents.

Good fleet risk management can also realise other benefits including:
  • Continued and enhanced promotion of a ‘risk awareness and employer care’ culture;
  • Ensuring in-vehicle and business technology is connected and used as effectively as possible to produce data to assist in controlling risk proactively;
  • Reductions in vehicle downtime leading to reductions in vehicle hire costs;
  • Reductions in the number of employees not being able to work or facing life changing injuries;
  • Protection of brand image and reputation through reduced incidents, consequent claims and unwanted media attention;
  • Reduced claim costs as a result of improvements in First Notification of Loss (FNOL) procedures, incident investigation processes and claims defensibility;
  • Ensuring continued compliance with relevant legal obligations;
  • Raising incident management preparedness, thus reducing the risk of regulatory action and large fines as a result of criminal investigations;
  • The provision of a positive marketing tool for broking purposes; presenting a business as an attractive risk to insurers and to the wider insurance market.

But how can businessess be recognised for the excellent work they already undertake in managing fleet risk?

In some cases, businesses align their fleet risk activities to good practises, possibly historically, shared between individual and industry recognised bodies and in some cases, via compliance with industry led accreditations leading to business opportunities. Clearly the requirement to meet legal obligations and a duty of care remain as overriding factors.

What standards can a business adopt for fleet risk management?

Many businesses operate vehicles because they need to deliver products or services, or have a mobile workforce involved in seeking out and delivering new ventures and opportunities.

As part of their primary purpose in their own sector, businesses will obtain recognised accreditations such as quality management (ISO 9001), environmental management (ISO 14001) information security (ISO 27000) and risk management (ISO 31000).

Therefore, many businesses will be used to applying the process of the “Plan, Do, Check, Act” model to develop policies and procedures that serve as the bedrock of all well-known ISO standards.

In many cases, an ISO standard defines a structure enabling a business some flexibility to define and document processes in a way that meets their own internal process whilst also meeting the structure or framework of the standard.

Why not apply the same approach to fleet risk management?

An ISO standard for Road Traffic Safety exists, and this can serve as one way in which businesses are able to gain recognised accreditation, demonstrating quality and control in the operation of vehicles as well as other areas of their business.

ISO 39001 outlines a framework designed to assist in controlling a key risk, which is preventing harm to employees and other roads users caused by unwanted involvement in a road traffic incident.

What is the benefit?

Justifying actions to achieve accreditation can be challenging and in many cases, accreditation is not sought because commercial benefit or enhancement of safety practices is not immediately apparent.

Data issued by the British Standards Institution (BSI) in 20201 reviewed the benefits associated with adoption of the business continuity standard ISO 22301.

Respondents in the manufacturing sector advised nine areas of benefit as shown in the below graph:

This graph shows the nine benefits associated with adoption of the business continuity standard ISO 22301 in the manufacture sector.
The benefits associated with adoption of the business continuity standard ISO 22301

Unfortunately, no data is available to compare these benefits directly with the adoption of the road traffic safety standard, although as indicated above in the coloured bars, some of the benefits in adopting ISO 39001 could be similar.

Noteworthy in relation to business continuity, 27.5% of the responders believed that certification has helped to reduce insurance costs and this benefit must be as a result of less claims, presenting the business as a more favourable risk. The comparison could be made that a similar level of benefit could be realised if ISO 39001 was implemented.

Could the changes seen from implementing ISO 22301 be similar by adopting the Road Traffic Safety Standard?

In conclusion, adopting a recognised ISO standard is not only good practice, but the presence of a defined standard raises awareness within a business to ensure accreditation is maintained. This in turn will ensure defined policies, procedures and practices continue to work effectively to manage risk.

What are the stages?

In general, the process of accreditation to an ISO standard involves three key steps:

  1. A gap analysis to determine how current practices align with the standard’s requirements and where other processes may need an element of realignment. An effective gap analysis assists greatly in the preparedness for the following stages.
  2. A first audit is undertaken by either BSI or an approved auditor representing BSI. The audit reviews what is in place and what needs to be in place.

    Based on the first audit, actions are identified and implemented.

  3. A further audit is undertaken and, if the results are favourable, an application for accreditation can be made.
How can Willis Towers Watson assist?

Willis Towers Watson can assist by supporting businesses to implement a framework of recognised risk management in road traffic safety.

The initial gap analysis can be carried out by undertaking a fleet risk review with outputs focussed on identifying actions required to meet the road traffic safety standard.

If needed, we can then assist in the implementation of additional actions preparing the business for satisfactory BSI audits, or alternatively the business may wish to self-demonstrate that its practices and procedures are in alignment with the recognised standard.

Footnote

1Information a data reproduced from BSI Horizon Scan Report 2020 https://www.bsigroup.com/localfiles/en-gb/iso-22301/resources/bci-horizon-scan-report-2020.pdf

Please contact us for further information.

Author

Risk Management Executive - Transport Risk Management

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