Business has wrestled with rising health-insurance costs for a decade. And we all have adjusted our behavior in light of rising personal costs as business pushes some of these increases down to us. In most cases, we've become better health-care consumers, and our general attitude toward the professionals who care for our health has shifted from one of automatic consultation to a more measured consideration of our alternatives.
We're not going to debate this issue in Construction Equipment; we're an equipment magazine, not a business-management book. But we are going to draw a line from health care to equipment theft.
For too many years, equipment managers have considered equipment theft in the same way we used to consider health care: "Not to worry, insurance will cover it."
Hold on, though, because insurance firms are using the words Howard Beale immortalized in the movie "Network": "We're not going to take this anymore." Insurance firms, as executive editor Larry Stewart discovered in researching "Construction Industry Moves to Stem the Theft Tide," have decided that the payouts on equipment theft are affecting actuarial tables. According to the Insurance Service Office, theft reports to insurance companies have increased10 to 20 percent each year since 1996.
Insurance providers, theft-prevention companies, and manufacturers are addressing this problem, Stewart reports.
But professional equipment managers must change attitudes toward theft, just as we have toward health care. Technology today provides many excellent options for asset tracking and theft prevention. But that's not enough. Managers must move theft into the risk-management portion of their job function.
Risk-management is more than GPS and police databases. Risk management means understanding the costs of theft, and partnering with those who insure fleets to ensure the least exposure in the event of theft. Risk management is a philosophy of anticipation, not reaction.
Be assured, once the actuaries start digging into equipment theft, they will find ways to win the premium and deductible war. Risk managementis their profession, and they are there to turn a profit for their company. We must find ways to work with them.
Read "This Business of Risk Management" from October 2005 edition of Equipment Manager, and "A Master of Risk Management" in November 2006.