Insurance Article, The Insurance Times 2023, The Insurance Times September 2023

Vision Zero and Insurance


Statistics relating to the casualties in traffic-accidents in India paint a grim picture. They result in over 150,000 deaths every year in India. This works out on an average to 1130 accidents and 422 deaths every day. Moreover, India, which is home to the largest population of children in the world, loses about 31 children every day to road traffic crashes.

Road-traffic accidents have a huge social and financial impact on society. Apart from the loss of lives and the resultant emotional trauma, they also affect low and middle-income households badly. When a family loses its bread-winner or a child or an adult is maimed or crippled it imposes a huge burden of care on the family. This takes a toll on their slender resources and pushes them further into poverty.

It is in this backdrop of recurrent fatalities and serious injuries, that the importance of Vision Zero can be best appreciated.

The Vision Zero Concept

Vision Zero is a multi-national road safety project in its own right and works to develop appropriate road-way systems. Vision Zero started in Sweden and was approved by their Parliament in the year 1997. This movement intends to eliminate fatalities and serious injuries from road traffic.

Vision Zero is based on an underlying ethical principle that no traffic death or serious injury is acceptable. There can be no divergence of views on this concept.  This approach has received global acceptance after its adoption in Sweden, Europe as well as the UK. The traditional road safety approach has been based on road users bearing complete responsibility for their own safety. However, Vision Zero represents a change in this mind-set by emphasizing that both transportation system designers and road users share this responsibility together. Thus the onus for safety does not fall entirely on the users of roads. And importantly, it imposes responsibilities on the planners and designers to eliminate fatalities and accidents. This approach has been found to be a more effective way to prevent traffic casualties than other techniques.

Statistics  from many countries indicated that cities that have taken a ‘Safe System’ based approach have achieved both the lowest rates of fatalities and the greatest reduction in fatality levels over a length of time.

Evolution of Vision Zero

The right to life and physical integrity is a basic fundamental right for everybody.  The International Labour Organization (ILO) has estimated that there are around 360,000 fatal accidents at work and more than 1.95 million deaths caused by diseases resulting from poor working conditions and exposure to harmful materials. The collapse of the Rana Plaza garment factory complex near Dhaka in April 2013 killing 1,132 persons and injuring nearly 2,000 more for example, is a human tragedy which cannot be forgotten. Hence, we have a long way to go in ensuring this primary humanitarian requirement since the large numbers of accidents at work and on the roads show that our safety standards are abysmal.

The Zero Vision strategy has evolved into a prevention strategy that is based on the concept that accidents whether on the road or at work can be prevented provided that right measures are in place. This concept also extends to occupational diseases which cause fatalities or permanently damage health. Thus an important aspect of this culture of safety is to ensure working conditions where people can make mistakes, without risking fatalities and injuries.

This application of the Zero Vision strategy in its broader sense is finding global acceptance. The International Social Security Association (ISSA) and the International Labour Organization (ILO) have advanced this concept further to various industries. (The International Social Security Association is an international organization bringing together national social security administrations and agencies. It was founded in 1927 and has more than 330 member organizations in 158 countries.)The heads of government of the seven most advanced industrial nations, known also as the G7, announced their commitment to Vision Zero at their annual meeting at Elmau in the year 2015.

Insurance vis a vis Vision Zero

Insurance helps to protect life, health and our physical assets from  loss or damage caused by insurable perils. Even as insurance helps to indemnify financial losses, in the process it also inculcates a culture of loss prevention. This is because insurers prefer that the insured customers always respond to risks, as if they were uninsured and take precautions to avoid loss. However, insurance provides the security of a financial safety-net in the unfortunate eventuality of an unavoidable financial loss,

There are many similarities between insurance and the philosophy underlying  Vision Zero as the essence of insurance is effective  risk management. Vision Zero also seeks to protect our most valuable assets namely life and health from the adverse consequences of risk.

The most valuable and indispensable human asset of any country is its work-force and safe-guarding the same is important. It is only when life and health are assured from harm can commitment to work be optimized. Therefore, Insurance and Vision Zero both endorse the success of enterprises, efficient production as well as motivated and productive employees.


The Principles of Vision Zero and the Role of Insurance

Vision Zero is based on the four following principles and insurers have an important role in realizing each of them:

  1. The first and foremost principle is that Life is not Negotiable

Nothing can be so important that it can be weighed up against human life and physical integrity. Safeguarding this right should be primary to everybody’s duty. This duty encompasses not only the Governments but also hazard-prone industry managers and insurers; particularly accident insurers.

  1. The second principle is to acknowledge that people will make mistakes.

A close examination of accidents, whether traffic accidents or at the work-place will indicate that that was human error in the chain of events which ultimately led to the accident. Hence, needless to mention, it is a fact that mistakes cannot be totally avoided. Even so, Vision Zero emphasizes that mistakes must not cost precious lives.

It would be pertinent to draw attention to the fact that mistakes are acknowledged by insurers to cause accidents and the entire gamut of liability insurance covers negligence as a cause of third-party claims.

  1. The third principle is that the ability to cope with physical and mental pressure is crucial

People do face a lot of mental and physical pressure in their daily lives. Since it is an accepted fact that they will make mistakes it is important to ensure that when accidents do happen, the injuries are minimized and serious injuries are avoided.

Design principles for road-way infrastructure and vehicles must incorporate safety features such as speed-limits, air-bags etc. Insurers with their experience of claims due to road-crashes are in a position to participate in contributing their inferences from their data on accidents to augment these safety features.

Even at the work-places where accidents that lead to claims are numerous, suggestions of safety protocols to the industry will be of great help in minimizing serious injuries.

  1. The fourth principle says that situational prevention comes first

This is an extension of the third principle, as it were. Traffic systems and work-places must be adapted to human beings as they are and not the other way around. This is the underlying thought  behind traditional occupational health and safety and  is referred to as – situational prevention.

However, it is also important for work-place managers and road users to also take responsibility for staying safe in all situations. Thus the concept of shared responsibility must be emphasized by the persons in authority.

Awareness in this regard can created by different bodies and insurers with a large volume of  data at their disposal have an important role to play in this regard.

 How Insurance can contribute to Vision Zero

Insurance can improve safety levels and contribute to Vision Zero in loss-prone areas in myriad ways. Some of them are elucidated below:

  1. All insurers pay a large proportion of motor third-party injury claims to the victims of road-accidents. They incur a lot of expenditure on their workforce and the legal fraternity to service these claims. They also have to maintain large outstanding claim reserves to pay these claims from the time of intimation until maturity.

          Were insurers to co-ordinate with the government, road- planners and vehicle – designers on the lines                             developed by Vision Zero to reduce and minimize fatalities and serious injuries it would have a positive impact             on lowering the incidence of accidents and concurrently improve their third-party claim outgo. This would be               of great benefit to society and result in monetary savings for insurers too, in the long run.

  1. The creation of a body on the lines of the erstwhile Loss Prevention Association of India, which could represent all insurers across the board where loss making trends and causes of accidents- whether on the road or in occupational areas – could be studied and remedial measures developed would be of great benefit to society at large and loss prone industries in particular.

          This body could also be utilized on behalf of the insurance industry to develop awareness at all levels to avoid               accidents-whether on the road, in the work-place or at home – for  better awareness of safety protocols.

  1. The actuarial dimension in insurance results in pooling and rating of similar risk profiles and incentivizing good risk management and claim-free record profiles. No doubt, this is at the core of insurance rating but insurance can achieve a greater purpose by redefining its boundaries. It can actively participate in customized risk-reduction measures in claim-prone industries such as chemical industries, mining and quarrying, for example. Many such fatalities and diseases can be prevented through effective occupational health practices and by raising awareness to inculcate a safety culture within the workforce. This will not only result in a safer working environment but also result in profitable and claim-free accounts for the insurance industry.
  1. The Bhopal Gas Tragedy in India still resonates globally. The chemical leak at The Union Carbide India Ltd pesticide plant during the night of the 2-3rd December, 1984 killed an estimated 20,000 persons in the city of Bhopal and left many with lifelong health problems. The learnings from this occurrence lie in the fact that hazards in industries are not limited to their physical boundaries. Such hazards can encompass large urban agglomerations very fast and without much warning. These situations can result in losses of catastrophic proportions. Hence, it is very important that such industries are identified and insurers and planners work to increase the safety-levels at these industries, without any delay.

How realistic is Vision Zero?

The goal of an accident-free world seems to be utopian. However, no quantum of financial compensation can be enough to cover human fatalities and serious injuries causing permanent total disablement. It is sometimes necessary to work with a vision of a better world to achieve the best for society.

If the gold-standard of safety as envisaged by Vision Zero can be applicable for rail and air-traffic, logic says that it must be also applicable to road-traffic. In the rare event of an air-crash or a rail-accident the media, government and the common public are vocal in their strident calls for investigation and remedial measures. The same standard should be applicable to road-accidents and occupational accidents as well. They should also be treated as avoidable occurrences.

As far as the question of cost is concerned, it would be pertinent to review the costs of accidents. The International Labour Organization (ILO) estimates indicate that approximately 4% of the world’s gross domestic product is lost due to the cost of injury, death and disease through absence from work. Hence, in financial terms alone there would be significant tangible gains from incorporating these safety protocols in society.


The Way Ahead

Insurance is evolving beyond its core area to encompass many new frontiers. Just as it is becoming important that insurers become sensitive to environmental, social and governance (ESG) concerns it is also necessary that they reflect many new and modern concepts in their operations and create value.

It would be pertinent to recall here that the world’s leading Lloyd’s of London insurance market have apologized publicly for their participation  in the transatlantic slave trade. They now aim to reflect  diversity in their work-force by recruiting more black and minority ethnic people, amongst other measures.

Thus insurance is being re-defined and re-imagined and it remains for insurers to take the Vision Zero movement forward to contribute to a better and humane society where the fundamental right to life and physical integrity is established for all.

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