Moving the dial on fleet performance
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For motor, Zurich offers so much more than just insurance – it seeks to optimise motor fleet performance through risk management, claims analysis and benchmarking, lowering operational and uninsurable risks
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IF THERE is one thing the insurance world isn’t short of, it’s data. But in the context of improving fleet safety for commercial motor customers, it can be a double-edged sword.
“I have witnessed many times clients who get overwhelmed with poor fleet performance statistics,” says Francis De Sanary, senior fleet risk and sustainability engineer at Zurich Resilience Solutions (ZRS).
A well-meaning insurer might typically send an undigested barrage of data to a commercial fleet operator, outlining on reams of spreadsheets the higher risk to a fleet based on items such as reputational damage, high staff churn, rising operational costs and more. To provide some context, ZRS has 26 such risk factors that influence fleet performance.
The exercise can get very technical very quickly, and for time-poor transportation firms it can be too much.
“They know they need to do something... but what?” De Sanary says.
Zurich Australian Insurance Limited is the local general insurance arm of Zurich Insurance Group – a leading multi-line insurer that serves global and local markets. For 100 years, Zurich has combined global expertise with local care to provide leading wealth and insurance solutions. Zurich’s local general insurance business is built around a fully intermediated broker advice business. This focus is paired with a state and regional presence, empowering local teams to make local decisions on the ground. We are passionate about our purpose to ‘create a brighter future together’ and use our resources to contribute to communities through disaster resilience, community partnerships and sustainability.
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“The benefit of our motor risk assessment is that it’s holistic in its approach and covers various leading measures that will influence … fleet performance”
Francis De Sanary,
Zurich Resilience Solutions
De Sanary calls this practice the “shotgun approach”, which contrasts with the highly targeted approach at ZRS that can translate high volumes of data into meaningful risk improvement actions at client firms.
DB Breweries in New Zealand, the local subsidiary of Heineken Holdings N.V., is a case in point.
“We were faced with a dramatic increase year-on-year in vehicle accidents. Although these were minor incidents, the frequency and cost of them was escalating in the wrong direction,” says Nic Boyd, procurement manager at DB.
DB was in the process of changing its telematics provider to implement an interactive tool using a gamification approach and decided to enlist the help of ZRS to identify areas of opportunity that would maximise impact on the accident rate.
“Some of these improvements were changes to our vehicle policy, or driver awareness of the annual costs of claims for a total company but also per driver,” Boyd says.
At first, Boyd worried about an impending data tsunami, but these concerns quickly gave way to real insights that helped reduce risk exposure.
Dovetailing with the ZRS assessment process is a claims-tracking system designed to be user-friendly and largely self-navigable.
“Our Z Track online system allows customers to quickly and easily see how their claims are tracking; monitor, measure, review and report on many areas of their fleet performance; download a claims experience report; and lodge claims online,” says Craig Sandy, head of motor for Zurich Australia and New Zealand.
“A key component of Zurich’s proposition is the expertise and knowledge of our underwriters located around the country”
Craig Sandy,
Zurich
Z Track has a customer-focused design that is intuitive to use and provides fast access to key information on a range of devices, including Macs, tablets and PCs.
It also generates an analysis to help determine trends and areas for improvement to help reduce risk, and the system offers benchmark reporting comparing a customer’s fleet against other similar types of fleets on a de-identified and aggregate basis.
The reports and analysis provided by ZRS give brokers and underwriters a tool that is objective and measurable to guide clients away from risk-prone practices. In the battle to change risk-prone behaviour, having data on hand is only one part of the task – it must also be communicated in a clear and impartial manner with benchmarks.
“It demonstrates to the client recognisable areas for improvement as well as a structured improvement plan. This creates a true open, transparent, sustainable, tripartite relationship between the broker, the underwriter and the risk engineer,” De Sanary explains.
Servicing is also a significant point of difference for Zurich.
“A key component of Zurich’s proposition is the expertise and knowledge of our underwriters located around the country,” Sandy says.
Zurich has underwriters in each state with full powers to make quick decisions and tailor an insurance program by offering different structures and different excess options, including having various types under one policy contract.
“It’s about finding the best solution for the customer,” he says.
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Making data useful in changing risk outcomes
A claims-tracking system that’s also easy to use
Published 26 Feb 2024
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Source: BITRE estimates
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In addition, Zurich can offer clients a Priority Repair Service (PRS) for sedans and light commercial vehicles, which enables customers to get back to business quickly.
“A customer has the option for us to refer their vehicle to a PRS Network Repairer if it is repairable damage and damage is less than $20,000,” Sandy says.
New factors set to influence fleet performance
Any number of ‘leading’ factors can affect the output of accident rate. One example might be driver assessment.
“[If] we identify that there is a gap in the client’s driver assessment process, we can then offer pragmatic, realistic solutions by way of risk improvement actions to fill those gaps,” De Sanary explains.
In this way, ZRS can “provide the light at the end of the tunnel” by supplying a quantifiable grading to show where the client should be in terms of risk standards once the improvement actions have been implemented. This report can serve as a map for clients struggling to find their way out of what might otherwise be an impenetrable jungle of data.
By focusing on leading factors like driver assessment and measuring them against the TRGS, Zurich can ultimately influence the performance measure of accident frequency, resulting in lower operational and uninsurable costs, improved driver safety and wellbeing, and optimised asset use.
“The outcome is that the gaps are not only identified but triaged and prioritised by the risk engineer with the aim to address the most significant risk improvements that will quickly move the dial towards improvement and overall fleet performance.”
Providing a map through the data jungle
Zurich has built significant expertise when it comes to recognising the growth of emerging risks on balance sheets – in particular, how businesses are moving to reassess what can realistically be insured; and how both elimination and mitigation might help bring some of the risks that have been pushed outside the envelope of what is insurable back into the fold.
One key future issue is the transitioning of the world towards sustainable energy. Insurers such as Zurich will need to address new issues, from broad questions about the supply of alternative fuels to very granular questions around lithium batteries.
Providing insurance solutions that address such issues is vital, as Australia’s road freight is expected to grow by 77% to 2050.
Another key issue is the need to take steps to reduce dwindling insurance capacity in the face of climate change.
“The increase of natural-hazard events is impacting the world in ways never seen before. Insurance capacity in some areas is being reduced, costs are rising, business interruptions are increasing in severity,” De Sanary says.
ZRS expects the ability of fleet managers to handle more frequent and severe weather events to become a major leading factor affecting overall fleet performance.
“ZRS has over the last several years recognised this and increased its capability in predictive tools used for climate-change and natural-hazard events so that clients can be better prepared to handle more frequent and severe weather events and, in some cases, mitigate any predicted negative outcomes.”
Some measures focus on preparing for such weather events while others centre around supporting wellbeing and mental health outcomes for drivers, staff and owners during the aftermath.
The broker role in using tech to optimise fleet performance
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“The risk assessment process initially is a little overwhelming due to the number of questions and details you need to provide. However, it gave a different perspective and approach, and highlighted areas where we can make further improvements,” Boyd says.
“The Zurich solution enables fact-based conversations, benchmarks claims history and gives you the tools to reduce risk and harm to drivers, as well as cost.”
But the upside goes well beyond impacting the baseline measurement of accident rate.
“These improvements would not only provide benefit in the traditional sense of reducing accident frequency and severity but work in parallel with the constant drive to improve staff wellness and retention,” De Sanary says.
This is where it becomes a little technical: Zurich recognises that overall fleet performance in terms of accident rate is a ‘lagging measure’ of risk but many of the input factors are ‘leading measures’.
The foundation of the ZRS assessment is the Technical Risk Grading Standard (TRGS) covering the 26 individual risk factors over seven categories, from recruitment of drivers, training and assessment through to vehicle maintenance as well as management systems and processes.
“The benefit of our motor risk assessment is that it’s holistic in its approach and covers various leading measures that will influence the lag measure, in this case fleet performance,” De Sanary says.
“Using this holistic approach to review the fleets risk, and how this may expose the business, allows us to then target the areas of concern and effectively apply the resources to where they are needed most.”
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Copyright © 2024 KM Business Information Australia Pty Ltd
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Copyright © 2024 KM Business Information Australia Pty Ltd
RSS
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Contact us
About us
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People
Contact Us
Specialty
Best in Insurance
Resources
Risk Management
TV
News
AU