SAFETY FIRST Safety Hotline Program Monitoring for AtRisk

SAFETY FIRST Safety Hotline Program Monitoring for “At-Risk” Drivers BECAUSE RESULTS COUNT

Session Objectives • Status of Highway Safety and Impact on Insurance Costs for Businesses • Who Is Safety. First? • How & Why Our Program Works • Are we going in the same direction on parallel roads?

State of Highway Safety • Assigned a Low Priority by USA – Allan Williams, IIHS, Status Report • Despite crash rate improvements, miles are up – lots of death and injury activity • Insurers are struggling with mounting financial impact • Multitude of issues facing “Joe Driver”

State of Highway Safety • Safety Advocates have a lot of good areas to focus on: – Road Design/Vehicle Crashworthiness – Enforcement of existing laws – Behavior Change in lieu of simple training – Graduated Licensing – Societal issues (cell phones, road rage, etc. )

State of Highway Safety • A ton of great work is being done by various teams and organizations. – Insurance Carriers & IIHS – NHTSA & FMCSA – AAAFTS – NETS – Proprietary Safety Vendors – And more….

Who Is Safety. First? • Transportation Safety Specialists • Consulting with Insurance Carriers who cover commercial fleets • Founded in 1996 with members who have many years experience • Headquartered in NYC Metro Area

Our Mission Statement Reduce the likelihood of commercial vehicle collisions How? Any method or practice that provides measurable, consistent, reproducible results

Program Introduction • Years of analyzing crashes have led to several conclusions: – Most accidents could have been avoided – Behaviors and Attitudes played a key role, not skills…(training was not the issue) We need a new approach to fleet safety that delivers meaningful results and is practical to implement

Driver Profiling? • Motor Vehicle Reports have been used by insurers to profile drivers based on type of violations, accidents, age, etc. • Predictive of continued poor performance, but based on history of existing behaviors (locking the door after the horse is stolen) • 80% are “clear” of any past issues “Clear” doesn’t mean “SAFE”

Direct Observations • • Too many drivers, too little time Perform differently while being observed How frequently is frequent enough? If you could prescreen who would benefit from this observation and narrow the field, then it might be more practical (ah, ha!)

Indirect Observations • Electronic Black Boxes, GPS (We sell this equipment) • Hardware costs can be prohibitive • Like Hotline Services, Managers use exception reporting to locate extreme driving behaviors for coaching and counseling The management team needs to care enough to read the reports, too!

Safety Hotline Service • • • Decals placed on commercial vehicle Motorists report risk taking behaviors Reports generated & sent to fleet Drivers are coached on behavior Reports returned noting action taken Monthly reports distributed to client

Safety Hotline Service • Flagrant behavior triggers calls • Three calls per 100 vehicles per month on the average • When calls are over 5/100/mo it is an indicator of serious problems • Management is accountable to Insurer to investigate each report

Safety Hotline Service • • 80% of drivers NEVER get a complaint 10% get ONLY one complaint 10% get MULTIPLE complaints As long as reports are investigated with a real effort to coach and counsel drivers many crashes could be avoided Six, independently conducted studies have been completed by insurers showing results

Program Impact Studies • • • Press Release, Transport Topics, P&C Online Hanover Insurance Company News Magazine, Fireman’s Fund Insurance Nationally distributed Associated Press Article 3/23/98 COMPANY WEB SITE Cornhill (UK) VENDOR Great West Casualty WEB SITE VENDOR John Deere Insurance WEB SITE Personal Communication Crum&Forster Each carrier documented strong (20%+) reductions in frequency

IIHS Partners Who Promote Hotline Programs Bituminous Insurance Companies Chubb Group of Insurance Companies Church Mutual Farmers GE Property & Casualty Insurance Harleysville Insurance Companies The Hartford Kemper Insurance Companies Liberty Mutual Insurance Group Montgomery Insurance Companies Oregon Mutual Group Royal & Sun. Alliance SAFECO Property & Casualty The St. Paul Companies Zurich North America Not all pay for the program, but recognize benefits to clients who participate in coaching drivers for improved performance

Other Providers Who Promote Hotline Programs Financial Pacific Seaboard Underwriters Scottsdale Utica National Selective PMA Group Crum & Forster Philadelphia Insurance Thorson and Associates Great West Casualty Northland CNA AIG Westfield Acadia Most will pay for the program, and recognize benefits to clients who participate in coaching drivers for improved performance

Safety Hotlines Save Millions One insurance carrier studied the impact of Safety. First and three of our leading competitors Conducted in October 2000, the study found that during the prior 12 month period, 117 fleets with 6957 vehicles experienced 546 fewer crashes than occurred in the previous year where no hotline program was in place.

Safety Hotlines Save Millions One insurance carrier studied the impact of Safety. First and three of our leading competitors These accidents were valued at $5, 390, 658. After expenses, their calculated Return On Investment was 52: 1 “Safety. First saved us the largest amount of money, had the best return of those services we use, and by far, had the most superior service”

What Types of Vehicle Fleets? Oil Jobbers, Delivery, Manufacturers, Taxis, Construction, Telecommunications, Healthcare services, Passenger transport, Truckers, Ambulances, Municipalities, …

Why the Program Works. . . • The program singles out drivers who need the most help from management based on credible, timely reports of performance • The program highlights specific risk taking behaviors that lead to costly crashes • Coaching aids/tools are provided to endusers to help modify drivers’ behaviors Drivers pay attention to their performance

Benefits to Underwriters? Provides a dynamic update on exposure changes to the underwriter (highlighting changes in driver population, hiring standards, etc. ) Many use our “drivers with repeat complaints” report to order mid-term updates on “at-risk” drivers. Provides underwriter with scorecard on management’s willingness to address safety issues (do they coach, do they dismiss the reports, is there a lot of turnover, exceptions to hiring practices, etc. )

Cost of Program? $13 annually, per powered unit $4 for each excess trailer Far less than 1% of GPW per unit Cost should not be a barrier to use the program

Why the Program Works. . . • The program singles out drivers who need the most help from management • The program highlights specific risk taking behaviors that lead to costly crashes • Coaching aids/tools are provided to help modify drivers’ behaviors Drivers pay attention to their performance

Hotline Benefits • Identifying unsafe drivers before they jeopardize lives • Promoting job stability and security by helping drivers become valuable employees, through effective coaching sessions • Rewarding safe and courteous drivers • Sending a positive message of safety to the general public

Are We Going In The Right Direction? • Our communication effort has always been direct to the “commercial” side of the insurance carrier and to business managers at fleets • Do motorists really understand our program or what to expect when they call us to provide details? Would the public benefit from a better understanding of our program?

Are We Going In The Right Direction? • Can Safety. First help IIHS in it’s efforts? • Would IIHS Partners/Members want to know more about this type of program? • Would more motorists be comfortable calling in if they understood the benefits?

Thank You For Your Interest Safety. First and Insurance Providers Working Together to Improve Results for Everyone