‘Face up to the risks – it’s your duty to care’

Any commercial organisation that has a fleet is being commercially irresponsible if it does not have a well-tuned risk management programme in place. Those are the hard-hitting words of Christopher Bullock, chief executive of the IAM (Institute of Advanced Motorists), which through its specialist subsidiaries, IAM Fleet, Drive & Survive and IAM Pro-Drive, is the UK’s largest provider of occupational road risk management and training solutions.

Cynics – and there are many to be convinced at board level particularly in SMEs of the fi nancial, legal and moral values of the benefi ts of robust at-work driving policies and procedures – can drum out the well worn mantra ‘he would say that wouldn’t he’.

However, analyse the data and the financial case, let alone legal compliance and corporate social responsibility issues, for managing occupational road risk along best practice guidelines is irrefutable.

Problem

But, that is the problem facing the IAM group of companies and their competitors in the at-work driving risk management marketplace. Not enough companies are taking on board the return on investment analysis.

As Mr Bullock explained, a lack of joinedup management in many companies means that thousands of companies across the UK, particularly SMEs, have absolutely no idea of the fact that the actual and hidden cost of road crashes is wiping thousands of pounds, and possibly hundreds of thousands of pounds, of profi t off the bottom line of businesses.

“In many companies there is a lack of bringing together the various costs involved in road crashes. That is because the fi nancial director looks after insurance; the fleet manager organises the repair of vehicles; and the HR director is responsible for the amount of time employees are off work,” said Mr Bullock.

“In many companies those costs are not brought together so there is absolutely no appreciation by the business of the real costs of a road crash.”

That is despite well-established industry figures suggesting that the ‘true’ cost to business of every crash involving an at-work driver is about four times what they think it is – average insurance claims are £700-£750 per crash.

Meanwhile, the Health and Safety Executive has calculated that for every £1 recoverable from insurance, between £8 and £36 may be lost to the company in uninsured costs.

Mr Bullock added: “And that is putting aside their responsibility as social citizens, which you cannot put a price on, and the fact that part of their social responsibility is to protect their staff and other road users.”

Knowledge

The lack of knowledge around the real cost of crashes to business is further underlined by a survey from RAC Services which revealed that 72% of fleet managers didn’t know the real cost that vehicle accidents had on their business.

Even more worryingly, the survey highlighted that it was smaller fleets (up to 10 vehicles) that had the least awareness, with 81% admitting that they didn’t know how much a vehicle accident affected the bottom line.

The RAC said the survey demonstrated a distinct ‘knowledge gap’ and showed that fl eet managers, particularly those managing smaller fl eets, were not aware of the techniques available to them which could help them manage costs.

The IAM celebrated its 50th anniversary last year and, coincidentally, it was the 20th anniversary of the launch of IAM Fleet. Today the IAM Fleet division is as large as the IAM charity with sales of around £4.5 million.

Acquired

IAM Fleet, together with Drive & Survive, which was acquired in March 2005, and Pro- Drive, which was bought in April this year and now trades as IAM Pro-Drive, accounts for approximately 45% of the combined revenue value of the fleet risk management and driver training market.

It is now the job of those businesses – each continues to trade separately – to convince more organisations, particularly SMEs, to follow the risk management lead established years ago by the likes of oil and pharmaceutical companies.

They took the view that their employees were ‘priceless’ and put them through driver training programmes.

“Most of the large companies have embraced risk management, but we have thinner penetration among medium sized companies and it has proved difficult to reach the smaller companies,” said Mr Bullock.

In major multi-national companies the health and safety department understands the cost benefi t analysis and has the authority to implement risk management solutions.

However, in smaller companies the problem is two-fold: there is invariably a lack of knowledge at board level in connection with the core issue and a difficulty in engaging the director responsible for health and safety in dialogue around at-work driving.

“Fleet operators broadly understand the issues and in larger companies many have the authority to implement interventions, but elsewhere we need to convince managing directors and their board colleagues of the fi nancial arguments. The return on investment is ridiculously good,” said Mr Bullock, who was awarded an MBE in the 2007 New Year Honours list for services to road safety.

The IAM group of companies maybe the number one in the fleet risk management market, but the organisation and its rivals have only touched the tip of the iceberg in terms of market penetration.

Some organisations are using the April 2008 implementation of the Corporate Manslaughter and Corporate Homicide Act as a ‘scare’ tactic to convince companies to measure the risk posed by their at-work drivers through sophisticated online solutions and then introduce driver training, initially for those designated ‘high’ risk.

Appeals

However, it is not a sales policy that appeals to Mr Bullock, who has headed up the IAM since 1995 when he joined from Shell. “Scare tactics are pretty blunt,” he said, pointing out that highlighting the financial argument, numerous examples of best practice and corporate social responsibility issues was the solution to winning the hearts and minds debate.

Historically, organisations such as IAM offered driver training to at-work drivers but that approach, said Mr Bullock, was ‘too narrow’ for companies to accept occupational road risk as a serious management issue.

Gradually, IAM and its competitors evolved into businesses that today provide risk management solutions embracing fleet safety audits, online risk assessments, e-learning, group seminars as well as on-road driver training and a host of supporting materials needed to assist fleets in reducing their exposure to road risk.

“In our view every person who is expected to drive for work purposes should have training beyond the ‘L’ test,” said Mr Bullock. “Online assessments can be used, as we do, to decide the priority cases for on-the-road training. There are costs attached to the business, but the biggest cost is to society.

“It is our job and the job of everyone in our industry to advise companies on what they need and not what they think they want. The ‘L’ test is not a level of driving that is acceptable. Passing the ‘L’ test puts an individual at the minimum level of what is required. It does not mean someone can drive particularly well and certainly not with the pressure of driving on business.”

The IAM was launched in 1956 by a group of motoring enthusiasts who felt that a better standard of driving would be an effective way to improve UK road safety. The IAM advanced driving test was born and more than 50 years on almost half-a-million tests have been conducted, mainly in private cars, but there are also commercial vehicle tests and motorcycle tests. About 50,000 people a year presently undertake a course of defensive driver training with IAM, but only 10,000 people annually take the advanced test. It is a fi gure the organisation wants to see rise and it is supportive of government moves through its ‘driving for life’ strategy to introduce a form of so-called graduated licensing.

“The finished driver is not going to be produced by only taking the ‘L’ test,” said Mr Bullock. “It is also impractical to undertake all training in one phase. However, learning and testing can be cranked up and the ‘L test is being made tougher. But we would like to see a system of credits brought in where good driving earns rewards through incentives.”

Continuing to evolve

Just as the government is looking to create a ‘driving for live’ skills programme so the IAM is continuing to evolve.

This year it has broken into the bicycle sector, which has included working with satellite broadcaster Sky on a ground-breaking cycle training initiative for staff (RoadSafe: summer 2007). And, at the turn of the year, the IAM Motoring Trust was created out of the AA Motoring Trust, which ceased operating on December 31, 2006. The Trust is now funding a five-year programme of safety and transport policy research aimed at protecting and promoting the interests of all road users Mr Bullock said: “Through the Trust we can promote the independent voice of the responsible motorist and all road users. As the largest organisation dedicated to road safety we are interested in road safety for all: safer roads, safer vehicles and safer drivers”

Disappointment at lack of support for FSA

However, almost two years on and Christopher Bullock, chief executive of the IAM group of companies, confesses to being ‘very disappointed’ at the lack of support for the organisation.

“At the time the FSA was launched, demand for risk management was rising rapidly and we thought it was time that a relatively youthful service-based industry was better organised with a set of standards and protocols,” he said.

“We also thought it was important that to help Government develop policies, the fleet training and risk management industry spoke with one voice.

“The IAM has put a lot of work into the FSA and we are disappointed that the industry itself has not supported the formation of the organisation. We are competing for share of the voice, not market share through the FSA.”

Current FSA members are: IAM Fleet, Drive & Survive, IAM Pro-Drive, Driving Services, BSM, the Royal Society for the Prevention of Accidents and the Fleet Support Group.

Mr Bullock says that the FSA was now ‘treading water’ and its future and very existence needed to be considered. Although, he points to the FSA having the ear of government in terms of consultation on safe driving initiatives.

Equally there is a need to widen its support base. The Fleet Support Group is the only non-exclusive risk management provider that has joined the FSA.

However, with virtually every contract hire and leasing company providing a risk management service and vehicle manufacturers, including Ford and Vauxhall offering training, maybe the time is ripe for the FSA to turn to those companies for backing.

Mr Bullock said: “I don’t think the FSA has successfully carved out a clear niche. There is not a sufficient consensus in the industry. We need to significantly increase the support base and the involvement of member organisations and establish a clear role for the organisation.”

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