The UK P&I Club takes a BowTie approach to risk management

News Release Thomas Miller P&I Ltd January 16, 2012

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16 January 2012 
 
 
<A name=OLE_LINK1>The
</A>UK P&I Club takes a
BowTie approach to risk management 
 
Marine mutuals like the UK P&I Club are committed to reducing the number and size of
insurance claims they receive. After all, in the P&I world, members own
their respective clubs and through pool arrangements within individual clubs,
they in effect pay their own claims. The smaller the level of claims, the
healthier the club becomes and this has a knock-on effect on the cost of
insuring through the club.
 
After much study and only after in-depth
trials with certain shipowners, the UK P&I Club is
now launching an innovative risk management scheme utilising a ‘BowTie’ approach
to identifying areas of risk and minimising the occurrence of incidents. The
Club’s Loss Prevention Director, Karl Lumbers, explains:
 
“Working with those members who wish to identify the
various threats to the smooth (claim-free) running of their vessels, we conduct
reviews on those areas which may cause claims. Thomas Miller P&I Ltd, the
manager of the UK Club, has access to an incomparable amount of claims data
resulting from extensive analysis of previous incidents over a period of 23
years and it is this that has enabled the Club to identify ‘threats’,
‘consequences’ and ‘controls’, the foundations of developing BowTie reports on
individual vessels.”
 
As an example, on one vessel, a Panamax bulk carrier,
five ‘hazards’ were selected as being the most frequent liability claim areas
seen by the Club. These were:
 
·       
Crew hazardous activities – personal injury;
·       
Carriage of cargo by sea – cargo damage;
·       
Ship in transit – collision/grounding damage;
·       
Ship/crew actions – third party property damage;
·       
Carriage of pollutants by sea – pollution damage.
 
Following an extensive on-board survey,’threats’
relating to all five hazards were assessed, ‘controls’ that needed attention
were identified and recommendations for changes in working practices were
proposed to the master and owner/manager.
 
<H3 style="MARGIN: 0cm 0cm 3pt">Applying the BowTie concept to management of risk on board
ships</H3>
 
According to Karl Lumbers, the UK Club has been
analysing claims over a period of 23 years, and has identified seven primary
risk hazards; 76 common threats, which if not contained could cause an incident;
and 450 controls which need to be in place and effective if the threats are to
be contained.  He states:
 
“Although sixty per cent 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’.
 
“How can we reduce the frequency of these ‘accidents
waiting to happen’?  What ‘controls’ should we be looking at
to ensure the ’threat’ is contained and an ‘incident’ does not
occur?”
 
<H3 style="MARGIN: 0cm 0cm 3pt">Keeping
the tiger in the cage</H3>
<H3 style="MARGIN: 0cm 0cm 3pt">
<H3 style="MARGIN: 0cm 0cm 3pt">Tangible benefits to shipowners</H3>
 
The Club’s approach offers strategic guidance to owners and operators
on tackling the root cause of expensive claims.  Using
quantified real-life case examples owners/operators are able to invest
proportionately in risk management and loss prevention activity. 

 
The detailed reports and reviews enable information to be shared
across the fleet and operational departments enhancing credibility, co-operation
and effectiveness.   The result will be a consistent and
inclusive approach that encourages sustained and measured loss prevention
activity over the longer term.
 
Teamwork and focus assists with Port State Control (PSC) compliance speeding up that process and reducing the delay to ships
and the burden on masters and crew during port calls. The transparency of
approach enables owners/operators to demonstrate good practice to their
customers, contractors, maritime agencies and other third parties.
 
Lumbers reports that several members who have been briefed on its
BowTie approach to risk management have been enthusiastic and have requested
surveys that they can consider and discuss amongst their management teams and
sea-going employees. He concludes:
 
“With this system you can also look beyond its primary role (for the
Club and owners), namely the reduction in claims levels, to the bigger picture.
It should always be remembered that behind so many claims are incidents that
lead to serious bodily injuries and loss of life. For those affected, including
families and friends of the victims, anything that helps make life safer at sea
has to be welcome.”
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