DRIVER FATIGUE AND THE CAUSE OF ACCIDENTS Tom Halliwell CEO Libra Insurance Brokers

RISK FACTORS IN THE FREIGHT INDUSTRY UNINSURABLE RISKS Global economic meltdown Local economic meltdown Weather conditions – droughts Political climate – riots, strikes, public disorder Competition – rates under pressure Debtor default The abovementioned risks needs to be managed in terms of your company’s internal risk management program

INSURABLE RISKS Accidents Liabilities to third parties Theft & hijack Damage to cargo Political riot Spillage & pollution Downtime following insured risks Risk transfer (insurance) comes at a cost Good risk management reduces cost of insurance Your claims history will dictate cost of insurance Understand your specific risk profile

CAUSES OF INSURANCE CLAIMS Percentage of Rand value in claims paid Own damage - 77% Hijack/theft - 9% Damage to third party property - 7% Fire - 4% Windscreen/other - 3%

RISK ELEMENTS OF OWN DAMAGE Percentage of Rand value in claims paid Fatigue - 35% Severe driving - 20% Speeding - 18% Texting - 15% Third party cause - 9% No safety belts - 3%

ACCUMULATION OF RISK Salary structure - Fatigue High average kilometres - Fatigue Night driving - Fatigue/Drowsiness Driver discipline/driving hours - Fatigue Over-speeding - Fatigue Texting - Not focusing Passengers on board - Not focusing

FLEET X CLAIMS VEHICLES 2012 2013 2014 2015 R 1 250 014 R 3 241 266 R 4 728 881 R 11 087 643

FLEET X CLAIMS GOODS IN TRANSIT 09/2011 - 04/2013 R 481 676 05/2013 - 11/2014 R 1 050 161 12/2014 - 02/2016 R 6 810 665

CASE STUDY CLAIMS ANALYSIS New drivers were paid much less than senior drivers All major accidents were made by new drivers Majority of them exceeded the company’s speed limit policy Majority of them violated the company’s drive times Majority of them averaged high kilometres per month They all had single vehicle accidents The above are all factors which ultimately led to fatigue

CASE STUDY CLAIMS ANALYSIS RISK MANAGEMENT PROGRAMME Strict rules on over-speeding All trucks grounded from 22:00 to 04:00 Salary structure changed on new drivers Employment process upgraded 24/7 Monitoring by Route Management Services COMBINED RESULTS AFTER RISK MANAGEMENT PROGRAMME Claims loss ratio prior to Route Management programme – 235% 4 Month Claims loss ratio after Risk Management Programme – 42.3 %

VALUE OF PRO-ACTIVE RISK MANAGEMENT 24/7 Monitoring Real-time interaction with drivers and transport owners Prior to Risk Management Programme Premium Claims Loss Ratio R261 570 177 R200 886 462 77% After Risk Management Programme Premium Claims Loss Ratio R294 159 848 R164 729 514 56% Notes - Total number of fleets fitted with I-Cab 170 - Trucks fitted with I-Cab devices 4 105 - Loss Ratio Improvement 21%

UNDERSTAND FATIGUE BETTER VIENNA PSYCHOMOTOR TEST Perceiving information from one’s surroundings Processing the information in the mind and decide how and when to act. Reacting on your mind’s instruction, using one’s limbs When fatigue/drowsiness sets in, these three critical human functions will be affected first and severely compromised … and in most cases, with disastrous consequences

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