Rod Penman, head of Public Services at Zurich Municipal, on making every penny count.

Well-managed highways play a central role in the lives of the communities they serve and are essential for economic growth. It is therefore concerning that newly released Government figures have revealed road maintenance spending by councils is at its lowest level in 10 years. Indeed, more than 30,000 insurance claims are made against highways authorities each year, forming the largest proportion of Public Liability claims at Zurich Municipal.

So how should local authorities react to this fall in funding to protect their highway resources? We recommend a risk-based approach is adopted to managing highway assets, as recommended by the latest code of practice .

Firstly, local authorities should collaborate when reviewing and implementing their highways maintenance processes and procedures. Not only will a collaborative approach potentially deliver savings, but sharing best practice will help to maintain levels of service across boundaries. If authorities were to assess their assets independently, neighbouring authorities could end up pursuing completely different strategies in terms of inspections and maintenance. This could become a threat to claims defensibility, should a serious accident or incident occur on a road that passes through multiple local authority areas.

Secondly, local authorities should invest in collating accident history, traffic volume and claims data. This will provide a broader evidence base for the impact of inspections and maintenance. Authorities can be more confident of their decision-making with the weight of analysis and understanding of such data. If the data shows many claims payments in a certain area, it suggests there may be a particular problem that can be addressed.

Local authorities should also seek to use historical claims data in using limited resources more efficiently. For example, if there are many claims relating to potholes on a particular road, the local authority might decide to resurface the entire road, rather than be reactive in dealing with each pothole after a claim or complaint is made.

Conversely, even with the road in a less than ideal condition, the data may reveal that there are very few claims. The local authority may then decide to carry on making repairs on a reactive basis rather than carrying out wholesale repairs to the road.

Finally, it’s crucial local authorities work with their insurers to harness the insight that lies in claims data. Ideally the insurer, the local authority risk manager and the highways asset manager will work together, talking to each other regularly and sharing information to mitigate highways risks. It’s particularly important for local authorities to remain engaged with risk and insurance managers during the revision process, so that highways claims defensibility is not compromised.

Insurers may also be well-placed to advise on other elements of the recommended risk-based approach, such as performing a critical trend appraisal, and developing and adopting an appropriate strategy and asset management policy.