Zurich Resilience Solutions (ZRS), born out of Zurich Insurance Group’s Risk Engineering network, is an expert in the field of risk management for alternative fuels.
Conducting over 60,000 risk assessments each year and managing more than 800 international programs, Zurich offers its customers quality service with the benefit of 75 years of experience under its belt.
For decades, ZRS has helped fleet owners and operators understand their work-related mobility exposures. With a purpose of supporting its colleagues with technical risk assessments and insights and a commitment to going beyond insurance, Zurich is able to offer a service truly unique and specific to the transport industry.
“Our customers are not limited to those insured at Zurich, and so we work, principally with brokers, to service the needs of companies, regardless of whether Zurich is their insurer or not,” says Mervyn Rea, Head of ZRS AU/NZ. “Going beyond insurance means we also focus on the uninsured aspects of risk too, and we’ve also built capabilities to assist with cyber, climate change and supply chain exposures. Hence, we are focused on helping business improve their levels of resilience.”
Zurich recently hired two new members straight from fleet management roles with first-hand experience across the truck spectrum in rolling out electric vehicles in fleets they used to manage, with one of those being the largest electric truck fleet in the southern hemisphere at the time. Because of this, Mervyn says the company is even more heavily armed to accommodate any need for its customers.
“We are now equipped to help any customer navigate their way through this changing landscape, ensuring they make informed decisions, select alternative fuelled vehicles that are fit for purpose, and assist with all aspects of that change management process,” he says. “We risk assess their motor fleet risk profile and look at ways to improve controls and lessen exposures often reducing their crashes. While this assists our underwriters, it also improves the fleet’s own resilience and helps them deliver consistency.”
Many of ZRS’ mitigation strategies focus on driver behaviour, so when improving a company’s driving culture and behaviour, the process often comes with several benefits such as less crashes, a reduction in the total cost of crashes, and better fuel efficiency. Crash repairs will result in the use of replacement parts and paintwork repairs that are often an unseen addition to a fleet’s carbon footprint. Each time we avoid a crash we avoid unnecessary carbon emissions.
“We are also partnering with a manufacturer and assembler of electric trucks to share knowledge and expertise, and to help their customers navigate challenges and risks as they embark upon these changes,” Mervyn says. “We also engage with a variety of government agencies charged with facilitating the changeover to alternative fuels, such as National Energy Resources Australia. We can now provide significant expertise, guidance and risk management to any business that wants to introduce electric vehicles and consider alternative fuelled vehicles into their fleet.”
Implementing alternatively powered vehicles into a commercial fleet comes with considerable hidden costs and quite a few challenges. Even more factors are introduced depending on the type of cargo being carried with an alternatively powered fleet. As Fran de Sanary, ZRS Senior Risk Engineer says, it becomes much more complicated in the case of, say, dangerous goods.
“We currently have Codes around the segregation of dangerous goods, and we need to consider the current situation when carrying bulk dangerous goods,” he says, “For example, ammonium nitrate when isolated from any source of combustion is relatively stable and diesel is classified as a combustible liquid only. Yet, when the two are mixed it can be highly explosive.”
Hydrogen fuel cell vehicles specifically will change the whole system of risk management for fleets. It will most likely be a whole new picture, with new practices and different procedures in place to complete certain operations. Fran says these changes will not only apply when changing from a diesel-powered fleet to that of hydrogen but will also be present when releasing a fleet of commercial electric vehicles onto our road network.
“Risk mitigation processes will be integral in ensuring that the fleet is not only compliant to the evolving regulatory changes but aim in becoming best in class,” he says. “Risk management plays a crucial part in the fleet evaluation and measurement of the overall maturity of the business operating processes. It will also provide realistic risk improvement actions that would achieve a level of safety and compliance – not only meeting the compliance level, but it would be aiming at that best-in-class target over time.”
In Fran’s words, Zurich Risk Engineers have gained remarkable insights and collective IP from their global journey of alternative fuelled vehicle fleet implementation. He explains that during a full onsite fleet risk assessment, the ‘gaps’ are identified and are given visibility, with a view that the risk improvement actions will not only provide a higher level of risk mitigation for the current operating environment but will prepare the client for the advent of the alternative fuels.
“The industry is now moving more rapidly towards full reliance on alternative fuels with a more defined pathway since the introduction of the first hybrids, and it is more likely now that the fleet of the future will consist of a mix of technologies, such as electric vehicles for local and last mile delivery and hydrogen fuel cell and hydrogen ICE for long distance and linehaul. This journey will be supplemented using green and synthetic biofuels.”
Now there seems to be one overriding question: why have OEMs been reluctant to invest in hybrid technology despite its clear advantages in cutting overheads? Surely a lack of faith in the industry or safety can’t be a factor, with companies like Zurich leading the way in global risk management? Fran suggests it may be because of a lack of general market acceptance combined with a change in the initial pathway to alternative fuels.
“The traditional commercial vehicle design, test, develop, build, launch and support model simply does not work when working through the initial evolution of alternative-fuelled vehicles,” he says. “The traditional time taken to develop and ultimately launch new conventional diesel fuelled vehicles into the market takes several years in practice. We only have to look at the development curve from Euro 4, 5 and now 6, and it must be noted these are only enhancements on the already proven base core design of the ICE engine. These have not been radical new designs such as fully electric or hydrogen fuel cell.”
According to Fran, when launching a new design, the OEM must also have in place global aftersales support, parts inventory, training and marketing – all of which takes time. He explains that effectively implementing alternative vehicles into a commercial fleet takes more than just simply purchasing the vehicle. The answer? You guessed it, quality risk management.
“I think it is important to note that implementation of alternative-fuelled vehicles into a fleet will at some point not be an option, they will be the only vehicles available,” he says. “Now the timing of that point is still in debate, however it is coming quickly.”
As a whole, the road transport industry is still some time away from fully converting to alternative fuel-powered vehicles. But through experts in the field like ZRS, many fleets waiting to sail have already boarded the ship.
