The Group believes in preventing losses that could result in property damage leading to an interruption in business. The Fiat Risk Management S.p.A. and Chrysler Group Risk and Insurance Management Departments address all stages of pure risk management including risk identification, analysis and treatment (including loss prevention).
The four pillars of risk management are:
- preventing accidents or limiting their effect
- adopting the highest standards for the prevention of property loss
- minimizing the cost of risk by optimizing loss prevention, investments, self-insurance and risk transfer programs
- centralizing and consolidating the relationships with global insurance markets
The entire risk management process is executed with maximum transparency and the highest level of expertise, supported by consulting companies specializing in industrial risk that, through field audits, ensure an in-depth, continuous and impartial assessment of risk across the entire Group. In 2013, 123 sites were inspected (covering approximately 98% of industrial activities at Chrysler Group and 64% in the rest of the Group) and 519 new projects were tracked ensuring that the highest level of international loss prevention standards are followed. During the year, the Group’s investment in loss prevention and mitigation measures totaled around euro 26.1 million(2). The euro19.1 million of Fiat targeted investments reduced loss expectancies by approximately euro 2.37 billion resulting in a Global Efficiency Index (GEI) of 0.81(3) in line with the highest international standards.
The Fiat and Chrysler Group risk management functions work to develop forward-looking, risk engineering approaches and solutions. In particular, this is demonstrated by the development of specific projects that highlight the contribution of risk management in addressing climate change issues. Current Group projects include:
- a new approach to insurable environmental risks
- a Visual Command Center(4)
- earthquake risk re-engineering
- climate change impact analysis
- carbon emissions avoidance through effective loss prevention
- prioritization of risk treatments using a standard loss expectancy evaluation process
- Business Continuity Management
The Group risk management function provides a critical, real-time contribution to the Group's sustainable development and competitive advantage in a global, fast-changing competitive business environment, with a focus on:
- refining the existing tools, processes, measurements and modeling of risks to facilitate more complete risk-based business decision analysis and the evaluation of emerging risk-based opportunities
- integrating and consolidating risk management programs
- developing risk awareness across the organization; and
- creating a cross-functional risk management committee that will periodically review all areas of Fiat and Chrysler enterprise risk management
(1) Pure risks are risks resulting from natural causes or accidental or malicious acts (fire, explosion, floods, etc.) that may result not only in damage to goods or facilities but also lead to a short- or long-term interruption of operations.
(2) Figures related to the period from 1 July 2012 to 30 June 2013 (insurance year).
(3) Global Efficiency Index for loss mitigation measures (GEI= reduction of expected damage/cost of protection) is recognized as a measure of best practice for industrial risk management.
(4) A tool that unites data from external sources, enterprise systems and internal devices into a real-time, consolidated view of risk, enabling threat alerts, assessments and action.