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Speaker1: [00:00:13] Welcome to Insurance Business Television, I'm Danny Wood, news editor of Insurance Business Australia. We're exploring the latest issues around driver safety and well-being with the global insurer Zurich. We're taking a look at how companies can approach risk managing their motor fleets and also take advantage of the latest technology to do that. I'm joined by a panel of experts in this area Peter Johanson, principal risk engineer of Zurich Resilient Solutions in Melbourne, Australia. Their focus in this insurance space is reducing risk and improving the resilience of companies that manage motor fleet operations. Hi, Peter. Well, Geoff says he's the CEO and one of the founders of Predictive Safety. He's in Denver, Colorado. Predictive safety is a global provider of impairment detection technology.

Speaker2: [00:01:01] Hi, Jeff.

Speaker3: [00:01:02] Greetings, everybody.

Speaker1: [00:01:04] And Stephen Perlin, CIO with Sleep Fit Solutions, also in Melbourne. The company is a leader in sleep and fatigue management. Hi, Stephen.

Speaker4: [00:01:13] Good morning.

Speaker1: [00:01:14] Peter, let's let's start with you. Can you tell us a bit more about the focus of Zurich Resilience Solutions?

Speaker2: [00:01:22] We had a bit of a name change in early 2020 because prior to that, we were only doing this sort of service really for Zurich Insurance and our underwriters. So our clients, but now that client catchment has expanded, so Zurich resilient solutions, the name change coincided with us now doing a lot of work for unattached or or clients that aren't insured by Zurich. And really, you know, we've got we've got a huge network. We've got about 700 risk engineers globally, about 40 and Asia Pacific and 18 locally here in Australia. And that transition from, you know, in the past just doing work really that was underwriting driven to now more client focused and unattached is what we're all about.

Speaker1: [00:02:08] Peter, you're also someone with about two decades of experience in this area, but what do you see as some of the key issues in driver safety and wellbeing?

Speaker2: [00:02:17] Well, the big one, right has been creeping up on us gradually, even prior to COVID cover just sort of announced this. A bit bigger is is the demand and supply of drivers. But then digging into that further, it's really about the driver capability and capacity. You know, we want more from drivers. What was a truck driving job years ago? We will. There's so much more needed of a driver today. And really, that then coincides with with driver or employee wellbeing and making sure that they're available for work and with all the, you know, the modern demands of the world, the imbalances of demands away from work as well as at work. It's about having that driver at the optimum to do the job functionally without, you know, deteriorating over time because it just grinds them down.

Speaker1: [00:03:11] So what are some areas where risk can be reduced resilience improve that motor fleets sometimes forget about?

Speaker2: [00:03:20] Well, a prime one is actively managing driver turnover and driver churn, as opposed to just being a victim of that and letting it play out and saying, Oh, you know, that's just a function of where we work. There's a lot that can be done to manage that. And again, that comes into the the driver wellbeing piece, but also at a bigger picture. There's the the performance management indicators of drivers. So by by managing lead indicators, you can create a place well, it's all about reducing spot fires to tell you the truth. If you're not distracted chasing driver turnover and you're not distracted chasing crashes, you can do more on your service in your customer delivery, part of your transport and logistics operation. So addressing those things, the driver churn and lead indicators of performance for service and safety means you don't chase your tail and you're not you're not chasing spot fires.

Speaker1: [00:04:20] What's changed most in this area in the last couple of decades?

Speaker2: [00:04:24] Certainly tech, both driver related and non-driver related. And then this increasing focus on driver well-being and employee well-being in the whole transport logistics sector.

Speaker1: [00:04:41] And so quite recently, managing driver fatigue was pretty difficult for companies. But what's Zurich been able to do here with this fatigue management risk system or fatigue risk management system, I should say.

Speaker2: [00:04:54] And if I a the fatigue risk management system, well, acknowledging in the first place that in our forums is all about the balance of exposures and controls. It's not about prescriptive hours, it's about, you know, how demanding is the task. What do I have to get done and how capable or available is the driver to be able to deliver the task? Now, acknowledging that we a lot of the tools we have can evaluate the exposure element really well so we can determine the level of inherent exposure in an operation with regards to fatigue. But we have these excellent business partners Sleep Fit, fatigue, fit, alert meter, preventative safety around developing the tools or providing the tools to provide better control to give peace of mind so that people feel or organisations feel more in control. There's no app solution with this. You never get everything perfect, but it's about that sense of being in control or feeling in control rather than a victim to everything around. And we, you know, we scour the globe looking for best practices. We have that global footprint, and the two business partners we've got here today are indeed the best in their class from what we've seen.

Speaker1: [00:06:15] And we'll bring in those gentlemen into the discussion in just a second. But one other important thing here is how to how does effective risk management actually flow through to customers and and can actually reduce their insurance premiums?

Speaker2: [00:06:29] A lot of people see insurance as a dollar swap exercise where, you know, claims rated. We, you know, an insurer just takes a bit to cover what the claims have been traditionally, and there's a margin on top of it now that's that's very sensitive to the, you know, the the fluctuations in the performance of the fleet. But we also rate risks or rate motor fleets based on a risk rating tool we have with 26 risk factors. Out of that comes a rating of poor, fair, good or excellent. Our underwriters, as as we work with clients to get them to feel in control. They move from claims rated to risk rated. And when they're getting into risk rated, well, you know, poor and fair, they're being loaded on the premium price and at good and excellent, they're being quite significantly discounted. So all those risk factors are 26 risk factors of which, you know, probably half of them a driver related that goes into creating a risk rating that influences premium price.

Speaker1: [00:07:34] You talked about the risk rating assistance to underwriters, but talking about companies running fleets of drivers, they often have an aging workforce. There's a lack of new talent. They're both becoming pretty acute issues. How can this this new technology help here?

Speaker2: [00:07:50] Again, getting back to those the driver churn and the performance lead indicators from the driver themselves, there's so much to help identify well, how how alert the driver is, how tired the driver is, how distracted the driver is. There's all these things coming through now that can help in that space, and some of them, you know, report to managers and others just report to drivers, which is very much enable and empower. The driver is very much where we come from. Then the other bit is about these performance. Lead indicators are baselines. So, you know, looking at the greater the bigger numbers of service and safety, if you can get if you can get drivers to understand when they're having bad day syndrome or managers to help with bad day syndrome, you can help avoid those losses before they occur and buy losses. I'm not just talking crashes, I'm talking wear and tear consumption, et cetera.

Speaker1: [00:08:55] So from a business perspective, it sounds like it is possible to reduce operating costs.

Speaker2: [00:09:01] Hugely so. So the biggest chunks of money, we slice and dice them into four big pieces. The first big unit is utilization. Now we can't really help with that. That's more about the service delivery of the operation. We have some business partners that also assist in that space. But then the next biggest chunk is really that consumption piece. So that's your wear and tear your tyres, your maintenance, your fuel, all that sort of thing. And then surprisingly, the next one is crashes. A lot of people in the insurance industry think that crashes are the paramount thing. You know, it's all about that. But to tell you the truth when you talk about reductions in the order of eight to 20 per cent in consumption. So we use a Figure 10 per cent. You put that 10 per cent figure down on a fleet. It far exceeds the savings in crashes even at the hidden cost level of crashes. And then over to the last order, sort of the indirect and the more hidden losses are around, like I said, driver churn. So yes, we can help certainly address the consumption, the crashes, which includes insurance and all the costs associated with it. And then the hidden costs and treat all those. Now if we can get, you know, typically if you get 10 per cent reduction in consumption, you normally get about 20 30 percent reduction in losses. It's pretty powerful. And then if you do all that right, drivers don't want to leave because you've actually got your performance management systems and everything tied in so nicely that you're a preferred place to work.

Speaker1: [00:10:38] There are some other new technologies out there that are making this task a bit easier. Let's bring in Jeff SACE now he's CEO of Predictive Safety. Can you tell us some of the background to your cognitive impairment testing and how it was inspired? I was really interested to read by that horrible environmental disaster. The sinking of the oil tanker, the Exxon Valdez in 1989 off Alaska.

Speaker3: [00:11:02] Yeah, I appreciate it, and thanks for bringing that up. It's a really fascinating origin story with the alert meter, which did indeed originate with the Exxon Valdez, the inventor of the alert meter was in the maritime industry when that when that incident happened, and he was really keen on finding a way to prevent those types of incidents from happening again. For those of you that may or may not be aware of the root cause behind that was really driven by fatigue, the vessel pilot is simply haven't had enough sleep the night before and wasn't able to stay focused throughout their shift. So the inventor again gentleman named Henry Boles. He thought, Let's find a solution to this, and he went to NASA. The and he went to the U.S. military. He said, What do you guys do to be able to test your astronauts or your soldiers to make sure that they can stay cognitively fit throughout the course of their mission of whatever they're doing, OK? And NASA particularly came back with this really great concept called a psycho motor vigilance test pbdt test for short. Now, for those of you that have never heard of this, feel free to Google Psychomotor Vigilance Test and NASA in the same line, and you're going to get all sorts of data and information on it.

Speaker3: [00:12:18] Now, the bottom line behind these psychomotor vigilance tests is they're all based on reaction time and and to various different analyses and how people behave in a very controlled environment, and they generally would take anywhere from 10 minutes to 20 minutes to execute it. Well, there's some real problems with that. You can't take something that takes 10 to 20 minutes to execute to a commercial environment. And you also don't have the containment that you might have in those areas as well. But Henry liked the idea, so he went to the National Institute of Occupational Science. Bill Nye Oshkosh Short, which is the science arm, is the easiest way to think of it of the U.S. OSHA. And with NIH, they provided grant funding to create what is today the alert meter. And it ended up being a 60 second cognitive assessment that is sensitive to fatigue. Impairment from all sorts of other reasons could be family crisis. It could be lack of sleep. It could be overwork and stress, it could be drugs and alcohol. But this this assessment was was developed to be non-discriminatory in nature. It's all shape based, so it doesn't matter what language you speak. And part of the research was to make sure that ninety nine percent of the population would be able to execute this assessment.

Speaker1: [00:13:38] So, Jeff, tell us a bit more about alerk meter. What is it exactly?

Speaker3: [00:13:42] Sure. Well, thank you. So alert meter is really designed to solve the problem of is this person good to get behind the wheel in the first place? When you think about technologies that are in the workplace, whether it's in transportation and drivers or in warehousing and logistics or across all sorts of other. Industries, but particularly in the transportation and driving, there's a lot of technology out there that is based on lagging indicators. So a camera system that looks in your eyes or a system that looks for a heartbreaking or hard steering of the vehicle. These are great solutions and they really have a place in the environment. But most of those are going to be lagging indicators, meaning if I've got a camera that's watching me, it's going to detect the driver falling asleep right before they fall asleep or right before they they hit a berm or have an accident. What alert beta is really designed to do is to provide that front end. Is this person good to get behind the wheel in the first place? And so a great way to to kind of develop that is to look at an example of one of our clients.

Speaker3: [00:14:48] They deliver gas products throughout the United States with drivers that go to a terminal to pick up their vehicle. And there's nobody at the terminal to check them out and make sure they're good to go. So they go to a terminal, they fill their delivery vehicle up with gas and they get out on the road and they deliver their gas, and nobody's had a chance to assess them to make sure they're good to go. So what the alert meter is doing for them is all of these drivers before they start their route. They have to do this 60 second assessment. And if they struggle with it two times in a row, it's rules and protocol procedure around it. It notifies their manager or their supervisor that there's something that is going on with this person now. Rarely does it mean that they're going to send them home and not have to work. More often than not, it's going to engage a conversation that might not have happened otherwise, and the manager can take appropriate action in assigning routes to signing, you know, how how risky is this situation and make informed decisions based on data?

Speaker1: [00:15:50] And just finally, Jeff, why? Why do you teamed up with Zurich? What does that relationship bring you?

Speaker3: [00:15:54] Yeah, I think that's great. I think that what it brings us and what it brings Zurich and particularly the clients in Zurich is working with is a really good tool to reduce that risk, improve the risk rating, right? So if we can help clients get from a, you know, for fear to poor to good to excellent, that's going to save them money. And it's also potentially going to save them lives and it's going to potentially reduce their insurance rates. So there's a lot of positivity that comes out of that. And then particularly if you're talking about drivers, it's not just the driver that we're dealing with, we're dealing with the public as well. And as Peter mentioned, we're talking about consumption. And when we look at a lot of our clients that are using alert reader and they do a return on investment analysis, what they start to see is not just a reduction in incidents and accidents, but reduction in overall cost to the organization from bumps and dings and all the other things that end up costing the company money.

Speaker1: [00:16:54] And Peter, what are your thoughts on this technology?

Speaker2: [00:16:56] So we think it's excellent. I sit on a team that meets every month and we've got people from our Zabar's, from all over the world, and we basically scour the world looking for best practices and best controls in the holistic impairment space as opposed to, you know, just explicit types of impairment like fatigue, alcohol and drugs, et cetera medical. This is the only thing we've seen that is scientifically validated, and that's the important bit here that picks up, you know, human impairment and can compare it on an individual baseline. It's a very powerful tool. It's scientifically validated. And now with it's the time it takes to deploy. It's it's readily accessible to all operations

Speaker3: [00:17:48] When you start looking at incidents and accidents that are happening within organizations, particularly in significant injury and fatality opportunities that are out there. When you look at that, a lot of the feedback that you see when you run surveys is 80 percent of those CIF type incidents are attributable to human factors. But then when you start getting into what are the human factors, that's where the real question comes into play. And so, as Peter mentioned, we're human factors are generally attributable to some form of impairment, and that's where we can come into play.

Speaker1: [00:18:23] Well, let's bring in Steve Perlman, too. He's the CEO of Sleep Fit Solutions. Steven, can you tell us about the focus of your company, what you're about and how you fit into risk managing motor fleets?

Speaker4: [00:18:35] Look, the mission for sleep solutions is to change lives and save lives through the power of sleep and fatigue management. We recognize that sleep and fatigue is out there. You're never going to reduce or remove fatigue from the work environment. And so it's really all about how do we ensure that people can continue to work safely whilst fatigued, and that's one of the big changes in the whole fatigue space over the last few years that that focus on understanding where your fatigue risk is putting the right controls in place and then making sure you can get on with the job. The way we do that is we take traditional and generally expensive forms of sleep and fatigue risk assessment, and we digitise them. We make them readily accessible, easy to use and and very cost effective. And we do that based by science. So all our solutions are all evidence based. They're all pre peer reviewed, and they they give fleet owners a scientific and legally defensible position around sleep and fatigue management.

Speaker1: [00:19:44] You have a specific platform that does that called fatigue fit. Can you tell us a bit more about how that works?

Speaker4: [00:19:49] One of the big challenges for fleet managers is how do we identify, quantify and mitigate fatigue risk? It's different to a lot of other workplace risks where you might have triple risks or working from home. It's quite quite easy to quantify, but with fatigue risk, it's it's one of those things we call risk itself. It's the individual who's the risk. And so traditionally again, you need to get either a consultant to come in and do a fatigue risk management assessment for you or build in-house expertise. And both of those are either expensive and or take time. What we've done with fatigue fit is we've collaborated with Professor Drew Dawson. He's an Australian based global expert in fatigue risk management, and we've pretty much digitized the process that Professor Dawson and his team would go through when they get a fatigue risk assessment on a client. So for a client, you answer a range of questions. There's a lot of really good guidance along the way to help you understand what fatigue, risk management or good fatigue risk management looks like at the end of the assessment. You get a report that benchmarks you against broader industry. It identifies whether you have any gaps in your fatigue, risk management compliance, and then it offers a range of solutions, most of which are self-serve digital solutions that you can use to close any of those compliance gaps that you've identified.

Speaker1: [00:21:17] Can you explain a little more some of the resources you're offering, fleet managers and their drivers to deal with this stuff?

Speaker4: [00:21:24] There's really four main areas around fatigue risk management that that fleet managers need to think about. Do you have the right policies in place? Because that's the foundation of everything. Have you trained your people? So do they understand what fatigue is, what causes it, how to recognise it? Do you have systems and processes in place to identify fatigue risk in your workplace and to mitigate it? And finally, are you auditing your processes to making sure that they're effective? And we offer a range of solutions in all those four domains so we can help people with developing their policy? We have online training for employees around fatigue, risk management and helping them understand their responsibility in managing fatigue. We have tools that people can use to assess as an individual their fatigue risk. So in some ways, similar to what Jeff was, Jeff was talking about. But but taking a bio mathematical approach. So again, it allows an individual to look at their fatigue risk when they present for work, and also how that's going to evolve across their shift and then have a conversation with their manager around what are the controls we're going to put in place to make sure that that individual can work safely throughout their shift. And the last one is audit. So again, how do we help you keep an eye on on the processes you've put in place? Make sure that they're actually achieving the outcomes you want, which is a safer and a more productive workplace.

Speaker1: [00:22:50] So, Steven, treatable sleep disorders like sleep apnea are a big issue for the industry at the moment. How does fatigue fit fit into that and help out with those?

Speaker4: [00:22:59] Yeah, it's it's a massive issue. Figures show that amongst heavy vehicle drivers, over 50 per cent have signs of sleep apnea. And of course, if you're driving a heavy vehicle and you have a fatigue related error, the consequences can be quite catastrophic. Traditionally, people needed to go and do sleep studies. They were very expensive. They're hard to access, and for most companies, it's just beyond their means to put all their drivers through that sort of process. What we've done is digitised the sleep assessment we use globally accredited peer reviewed sleep assessments, and we can assess for sleep apnea, insomnia and also for mental health, which again goes back to pizza point about broader wellness for for the workforce and where we identify. That somebody at high risk of one of those treatable sleep disorders, we then have pathways for treatment. So what this really does is it helps individuals and companies manage the risk around treatable sleep disorders, get treatment for their people, which can be life changing for them, and also significantly reduce the risk of a fatigue related error because their people are getting good quality sleep. They're returning to work refreshed and therefore their levels of fatigue are much lower, and that's a real win for the industry.

Speaker1: [00:24:27] Thanks, Steve. So back to you, finally, Peter, how does fatigue fit help your fleet risk management offering?

Speaker2: [00:24:33] So again, bringing back this scouring the globe thing more talking locally here because this is about compliance triggering then further support and controls and services. Fatigue is an extremely powerful, low touch, and that's the important bit low Typekit evaluation tool of compliance with us with regards to fatigue and by low touch. I mean, we're talking 15 minutes, 20 minutes, 30 minutes, something like that. It's incredibly low touch, but what it gives you is, yes, a snapshot of how compliant you are. That's not good enough for us. If it was just that, that wouldn't be adequate because that's just evaluating and assessing. We need people to move and transition to in control. Then the suite of tools that fatigue fit has a tap into through its extensive network and Drew Dawson and all the others. That's really about both treating, helping the organization and helping the individual to get in control of any shortfalls in individual related sleep. So powerful, supported with great tools and services. Super accessible. And again, this influences our grading. We've been, you know, I think we're recognized as an industry leader, an insurance industry leader in the motor vehicle insurance space. We've certainly been a leader in the fatigue front of risk, not just in motor, but in that space for almost 20 years, with associations with the like the likes of Dr. Drew Dawson and some others. And I think this this really brings grunt to our service offering because we're we're helping individuals. I've had drivers personally want to meet me on a revisit because I wrote a recommendation about sleep apnea and getting that checked out. And that was a lot changing for drivers. So there's some really good wins and stories in here, but they deliver a real grunt at the risk level and then at the commercial and insurance and premium level.

Speaker1: [00:26:46] Well, thanks, Peter and gentlemen, an interesting discussion we've been talking about how companies can approach risk managing their motor fleets and also take advantage of the latest technology to do that. We've been talking about that with Peter Johanson, principal risk engineer with Zurich Resilient Solutions in Melbourne. Geoff is CEO of Predictive Safety in Denver, Colorado. And Steven Pearlman, CIO with Sleep Fit Solutions, also in Melbourne. You've been watching insurance business TV. I'm Danny Wood.

[00:27:14] Bye for now.