I’m often asked my opinion on what I believe should be included in an effective safety program. While I realize there are many opinions, I gladly offer one based on my 22 years of experience with Federated, the cooperative’s property and casualty insurance company. When reading the rest of this article, you will see that I truly believe that operational excellence equals safety excellence.

In order to be fiscally accountable to all of our insureds, Federated Rural Electric Insurance Exchange offers competitive rates based upon actual underwriting experience for every line of business we write. Effective control of premiums is based on preventing accidents. The heart and soul of an insurance company is not just handling claims in a fair and professional manner, but also in providing constructive recommendations for the prevention of accidents.

Are you aware that two percent of our claims each year cause about 70% of our claim costs? This handful of claims drives the overall cost of our members’ insurance program. Ultimately, these losses affect the rates charged in the state and the overall cost of our members’ property and casualty insurance program. If we were able to eliminate a good percentage of those large claims each year, not only would this affect the cost of our members’ insurance program, but it would also reduce the unbudgeted costs that must be dealt with on the cooperative level. Just think of the impact on your premiums if we could reduce the claim costs by 20 percent!

To me, the first step towards reaching this goal is for everyone to take a close look at their system’s safety and loss prevention program. Is the program based on managing risks on a proactive basis; or has your program become one that responds to a situation rather than controlling it?

Safety management is doing what needs to be done to obtain desired results. The underlying goal is to obtain lasting results in the area of safety and loss prevention. Safety may not, and cannot, be viewed as just an agenda item. It must be a part of an organization’s culture, carried out by people who care about the correct way to do the work without unnecessary expenses, accidents, interruptions and quality issues. The following are just a few of the underlying causes that could result in an undesired event when safety programs are more about policy, rather than obtaining lasting results.

• Not taking the time to do things properly
• Taking shortcuts, not wanting to do things right
• Lack of knowledge, don’t know how to do it
• Mixed messages within the organization’s culture that production is more important than safety
• Unexpected consequences as a result of the decision-making process

I do believe that by working together we can have a positive impact on the cost of our members’ insurance program. Fewer accidents can mean fewer outages and a more efficient use of power. And, of course, loss prevention means conserving and protecting the most precious resource, the lives of system employees and your members.

We encourage you to learn more about managing an effective safety and loss prevention program by logging on to Federated’s member website and viewing the module titled “Safety Management” located in the Management Resources section of Federated’s Safety Knowledgebase. As mentioned previously, I truly believe operational excellence equals safety excellence, believe it, expect it, and live it. As always, let us know how we can help!