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Kathleen M. Ireland revamped IBM's global auto insurance program for consistency


Before Kathleen M. Ireland assumed responsibility for risk management at IBM, the technology company's international automobile insurance program was a patchwork of programs bought locally with varying insurers, limits and protection.

“The main point was, in the past, it was a very difficult program to put together,” said Ms. Ireland, who serves as IBM's vice president of global risk and insurance. “I worked on it when I was on the brokerage side with IBM, and the only resistance was the leasing companies, who like to keep the insurance as part of the lease. But when you do that, you can't see what your own loss experience is, because many times they are self-retaining that.”

Ms. Ireland said “you also can never really untangle what the cost components are of the lease, because the insurance element is buried in there. You really don't have visibility to what levels of protection of third-party liability insurance are there.”

With more than 22,000 leased vehicles in 34 countries, a global approach made sense. “You have all of the limits, you can see what your losses are and control your losses,” she says.

Controlling losses means that IBM is always looking for ways to see what the common-sense things are that can be done to lower losses. Ms. Ireland said the biggest issue regarding automobile use is behavior. “How do you raise the awareness of safety?” she asked.

As a result, IBM benchmarked with several other companies that are in the automotive industry with global fleets to find out what the behavior was and, as a result, implemented new strategies.

She said the biggest behavior modification strategy is to consider whether “your boss were to find out that you had an accident when you were in a company car. We care about our people, we care about other people and our assets, because all three things can be involved in an auto accident.”

So, any driver involved an accident — whether it was the driver's fault or not — must have a mandatory meeting with his or her manager.

Another area examined was to look at trends of who is having the accidents, because most of these vehicles are a company benefit, an employee benefit, she said. In some countries, such as the United Kingdom, “it's a standard practice that when an employee reaches a certain job level, the employee gets an automobile as part of his or her compensation.”

Such strategies were effective in reducing the loss ratio from 134% in 2010 to 70% in 2013 without the need for increase in cost.

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