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Product Risk Control
Large product losses do have a serious impact on the companies involved. Most standalone companies have no, or limited own experience with (large) product losses and companies which have had a large product loss often lack tracking and other management systems for risk awareness and risk control.

A good and effective approach for risk awareness and control comprises of the following steps:
1 Preliminary/quick scan of product and/or activities for a basic risk assessment
2 Risk control planning for further risk control activities
3 Further/in-depth analysis and assessment of specific (hazardous) products and company activities
4 Consolidation of results and action plan for risk improvement and control
5 Implementation of risk improvement and periodical review of products, activities and risks and regular communication regarding product risks to increase the awareness and knowledge (complaints and loss dabase).

1 Preliminary / quick scan of product and activities
The typical traditional approach is mostly a quick scan based on categorization by hazard grade dependent product/product type, similar as for Property damage and Business interruption.
Premium risk engineering applies a scan /preselection based on 5 conditions instead of only the hazard grade for the product/group and results in high accuracy levels of > 50% are achieved by periodical calibration. .
This Basic risk is classified in 5 levels ranging from very low to very high.

2 Risk control planning
The outcomes of the Basic risks determined by the quick scan are applied for risk control planning.
Typically the risk control planning comprises of :
* Product risk analysis and/or risk assessment for the highest Basic risks
* review of existing and additional information for moderate Basic risks.

3 Product risk analysis and product risk assessments
Further and in-depth analysis of the product risk and product risk control can best be provided by a Product risk analysis and/or on-site product risk assessments.

Product risk analysis is a team analysis within the company by which product risks are analysed and quantified by relevant company representatives. The main outcome of the Product risk analysis is a risk profile with risk improvement actions for the non-tolerable/main risks as developed by the team members (stakeholders).

The on-site product risk assessment comprises of various meetings with relevant disciplines and management plus a plant tour. Main outcomes of the product risk assessment are the determination of Product risk (level) and credible loss scenario’s plus tailored risk improvement actions. The effectiveness of the product site assessments is increased considerable by applying consolidated information of the relevant loss analysis.

4 Product risk control dashboard
Consoliadtion of results and status of the Product risk control per product and or company, and/or Business group level. Consolidated and used for further risk controls actions.

Example of Risk Control dashboard

5 Implementation of risk improvement and periodical review of product/activities and risks
Risk awareness, risk assessments and hazard analysis form mostly at least half of the risk control. However implementation and review of improvement actions together with review of effectiveness and new risk conditions is the essential for effective risk control. This requires strict monitoring and support/instructions that can best be supported/supervised by a central risk control function. For risk control and awareness the company should implement a structured compliants and loss dbase.

Example/Best practices
Turnaround in serious loss development regarding product risk control.
Company ABC is engaged in production of products for construction. The product (liability) losses over the last years have increased seriously compared with peers and previous years. The applied risk engineering structure include:
· In depth technical incident and loss analysis of company’s and peers product losses including loss drivers for recall and dismantling
· Team hazard analysis for product risks at corporate level and for product risks for different products groups
· Site assessments for product risks and product liability
· Consolidation of data resulting in framework for risk control.

Within 12 months from the first meeting the company decided to implement all defined risk improvement actions for the risks that could not be tolerated. By working with different teams from board to local companies the new risk control approach was fully embraced and expanded to sister companies. The main results were change of culture for risks; less losses and incidents and higher customers satisfaction.

For contact and/or more information for similar consutancy services for general liability, or property damage- business interruption contact Premium risk engineering info@premiumriskengineering.com