UK Club takes the ‘bow tie’ approach to reduce risk

UK Club scheme measures risk to reduce members' premiums

THE UK P&I Club has launched a new risk-management scheme to identify areas of risk and reduce frequency of incidents.

The club has always used its experience handling shipping liability claims to raise awareness of things that can go wrong and has passed that information on to those "at the sharp end". Now it says it wants to focus on new ways to help members to prioritise risk within their own fleets.

According to the club's loss prevention director, Karl Lumbers, UK Club analysis of claims over 23 years has identified seven primary risk hazards, 76 common threats that need to be contained to avoid incident and 450 controls that must be put in place effectively to contain threats.

Using this information, the club has created what it calls a "bow tie approach" that recognises the three elements of any claim: threats, consequences and controls.

Mr Lumbers said: "Although 60% of UK Club claims are caused by human error, human error is often only the straw that breaks the camel's back - the last event in a chain of causal events. These causal events can normally be traced back to failures in one or more areas of ship operation; we sometimes refer to them as accidents waiting to happen."

The club says its new approach offers guidance to owners and operators on how to tackle the root cause of expensive claims.

"The detailed reports and reviews enable information to be shared across the fleet and operational departments enhancing credibility, co-operation and effectiveness," the club said.

"The result will be a consistent and inclusive approach that encourages sustained and measured loss prevention activity over the longer term."

The club has worked closely with individual members to trial and develop this new system which records and rates risk so that a scientific approach to claims can be taken.

"As we extend the use of the system, this will in turn help establish trends and benchmarks which we hope members can use within their own safety systems to help manage their risks. The old saying 'you can't manage what you can't measure' has never been more valid," the club said.

Liz McMahon of Lloyds list, Tuesday 24 January 2012

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