Expert Risk Articles

Risk Futures - Safely Parked

Before a new car is sold and rolled off the showroom floor, it has to embark on a potentially perilous journey from the manufacturing plant to the dealer. Allianz Global Corporate & Specialty insures against the wide range of risks new cars face before the keys are handed over to the new owner.


Safely parked

Allianz Global Corporate & Specialty (AGCS) insures the vehicle storage compounds of many car manufacturers and has developed a model to evaluate and compare transport risks. An inspection of the storage compound at a Volkswagen plant in the eastern German city of Zwickau shows how the tool is applied in practice.

A sea of “anthracite”-shades, broken up by a bright splash of color here and there. Gleaming new cars from the Volkswagen Group (VW) spread out as far as the eye can see. They are parked in neat rows, creating the impression that a ruler was used to produce such parade-ground order. These fledgling vehicles recently rolled off the assembly line and began their initiation into the world of small and large dangers lurking on the plant’s vehicle storage compound. Free-spirited pebbles, carelessly opened doors and hard-hitting hail can do more than just put a small dent in these cars.

Realizing this, manufacturers obtain transport insurance policies to cover the trip that takes the vehicle from the factory to the storage site and, ultimately, to the dealer or customer, no matter whether the journey is done by commercial vehicle, train or car-carrying ship. When damage does occur, the insurance company covers the cost of the vehicle or the repairs needed to restore it to its original condition. VW’s marine risks are covered by AGCS as lead insurer.

Safely parked cars

Florian Karsch, Team Director of Transport Insurance and Risk Management at Volkswagen Versicherungsvermittlung (VWV), handles several thousand claims each year – from damage caused by pebbles to capsized car-carrying ships. Overall, the number of transport-related claims is falling. “We have made risk management of our storage compounds a top priority,” Karsch says. VWV has also hired a risk engineer, Torben Stadtaus, who serves as a technical point of contact both inside and outside the company.

Detailed storage guidelines

Stadtaus coordinates a range of risk-management measures. VW’s guidelines fill more than 80 pages, spelling out in precise terms how vehicles are to be stored, handled and transported – beginning with belt buckles that have to be covered up and extending to the exact number of centimeters separating the parked vehicles from one another. “We test new prevention measures at one site and then systematically introduce them at all plants,” Karsch says.

Joint inspections conducted by VW and AGCS are conducted to determine just how the comprehensive guidelines are being applied. “You really have to go to the site in order to get a feel for its special characteristics,” says Piotr Szymczak, Marine Risk Consultant at AGCS. Claims also require that special precautionary steps be taken from time to time.

The VW Group uses well over 200 vehicle storage compounds globally. Up to 30,000 vehicles can be parked on the largest ones. On this particular day, Szymczak and Susanne Weber, Senior Underwriter Marine at AGCS, have traveled to eastern Germany, to the VW plant in the Saxon city of Zwickau. Every day, 6,850 workers produce around 1,200 Golf compacts and Passat sedans. The plant site has about 3,000 parking places used to temporarily store the brand-new vehicles.

Safely parked inspection

In his first task of the day, Szymczak focuses on getting an overview of the facility on paper: he runs down a list of questions with René Stenzel, who oversees vehicle shipping at Zwickau, and Daniel Schlefcke, who coordinates fire-prevention: What does the underlying surface consist of? What sort of fire prevention steps have been taken? This “storage scoring model” was developed by AGCS in conjunction with VW and other manufacturers to make it possible to evaluate storage compounds according to similar criteria (see infobox). Once the 45 questions have been answered, the next step is to head out to the vehicle storage compound itself on this sunny, but chilly November day.

Low exposure to natural hazards

Before setting off to Zwickau, Szymczak and Stadtaus analyzed the natural threats faced by the storage compound. The location appears to be exposed to few real dangers from bad weather and the forces of nature. Once at the site, the experts again examine whether the area is subject to any flooding threat. But the Zwickauer Mulde, the local river, cannot flood the higher-lying factory site.

Szymczak has a very favorable impression of the overall condition of parking areas at the plant, which was built in 1990 and is operated by Volkswagen Sachsen GmbH. All the compounds are paved. Even when the AGCS risk engineer stoops very low, he does not see any loose objects or other problems on the surface. The parking areas are clearly marked and readily accessible, and the distance between the vehicles is generous.

The fire-prevention program fulfills high industry standards: The ban on smoking is systematically enforced. An adequate number of fire extinguishers and hydrants have been installed. And the plant’s own fire department with 10 well-equipped vehicles and a trained crew can respond within minutes.

Safely parked lot

As in all other temperate climates, the vexing issue of hail remains the biggest cause of damage to vehicles stored in open areas. “The relevant hazard maps show that the region’s hail risk is in the mid-range. But we rate it somewhat higher owing to our own claims experience,” Szymczak says. Stadtaus agrees: “We expect to see the threat of hail rise in northern Europe as a result of climate change and are therefore expanding our protection measures.” Overall, though, the hail threat at the storage area is considered to be minor, because many of the vehicles are kept in a recently built parking garage or are protected by a roof.

Security measures are also checked during the inspection. Szymczak has no new recommendations for the Zwickau team. But he knows from inspections of other storage compounds that one area is frequently in need of improvement: “Organized gangs are becoming ever more brazen,” Szymczak says. “For this reason, smart electronic systems like video cameras, motion detectors or sensors on the fences should be installed as a rule, to protect the grounds and peripheral areas.” Breakin protection also should not be ignored: A combination of mechanical and electronic systems to secure the periphery, plus security guards, promises to provide the best security management.