Driving Insight - Fleet Risk Management
The key to risk management success Holistic approach and cross-party communication
The legislative agenda for 2005 will continue to be dominated by issues relating to health and safety, corporate killing and the all-encompassing challenge of risk management. For fleet managers the unavoidable feeling of sinking under the weight of increased regulation and legalities will remain. But whilst the news continues to be dominated by these issues, many in the fleet industry will remain stagnant in implementing a robust risk management strategy. Given its complex nature, a part of this is driven by a comprehensible lack of understanding. A recent report showed that 79%1 of businesses do not have a risk management strategy in place, nor do they plan to instigate one.
However, this worrying level of apathy is compounded by the lack of willing amongst suppliers, from insurers to leasing providers and brokers, to communicate with each other and focus on what is best for the customer. This lack of enthusiasm in sharing the customer ownership only reduces the ultimate value in the customer relationship. Fundamentally, their risk exposure is dramatically increased and any strategic decisions that need to be made are driven by commodity.
Admittedly, there are a plethora of issues involved with risk management. But if a holistic approach is not taken where each entity is considered on its own merit then any risk management strategy will be compromised. For example, a leasing company could bolt on incident management as part of an overall deal, thereby tempting the customer into making a commodity purchase, rather than viewing accident management as a fundamental part of the risk management strategy.
Some of the problem lies with the internal structure of the customer. If the fleet manager reports into the commercial director, but the risk manager reports into the managing director, and the finance manager has overall control of budget, how can a stringent plan be implemented? If these factions are then responsible for separate suppliers, the data from the insurer, the data from the fleet company, the broker and the data from the incident management company is also not consolidated and analysed. Aside from being unable to properly develop an appropriate strategy, the value that is wasted by ignoring this data is dramatic.
The answer lies in bringing all parties together into one environment, with ‘what is best for the customer’ as the single point on the agenda. A team-based and communicative approach is the only solution in developing a robust risk management strategy. The industry can no longer ignore or devalue such an important concept. It should not even be viewed as forced legislation, but as a fundamental responsibility for all businesses and at the core of corporate culture and practice.
- Profit through Safety: A Boardroom Plan for Action – Kwik-Fit
