31 May 2024ArticleAnalysis

Innovating safety: Autoliv’s captive insurance journey

Karl-Johan Rodert of automotive company Autoliv explains to Captive International how it came to create an award-winning captive.

In the dynamic world of automotive safety, where innovation is the key to saving lives, Autoliv stands out as a leader. Its remarkable journey in risk management and insurance innovation was recognised with the title of “Innovative Insurance Programme” at FERMA’s 2023 awards. Karl-Johan Rodert, the global director of captive & insurance at Autoliv, shared insights into the company’s captive story with Captive International.

Autoliv describes itself as a leading tier one supplier in the automotive safety industry and is well-known for its commitment to safety products such as seatbelts, airbags, and steering wheels. However, behind the commitment to safety lies a complex web of risk management challenges, particularly in insurance programmes, as Rodert elaborates.

“When I arrived at Autoliv, we were facing growing difficulties, especially in our liability and recall insurance programmes,” he says. The escalating number of claims, particularly in the recall segment, presented a pressing concern. “Premiums skyrocketed year over year, and securing adequate capacity became increasingly challenging,” he adds.

The pivotal moment came when Autoliv realised that the traditional insurance market could no longer meet its evolving needs. “We were at a crossroads where management questioned the feasibility of insurance due to soaring costs,” Rodert recalls. This compelled Autoliv to explore alternative risk management strategies, eventually leading to the inception of its captive insurance solution.

The captive was formed a year before Rodert came to Autoliv and he was charged with developing it and use the captive to best way possible. When he restructured the combined liability and recall insurance programme, he encountered scepticism and resistance.

“The captive is a vital part of the structure of this programme, but the scepticism was not around the captive itself or forming it, but rather how we wanted to use the captive and the structure of the liability/recall programme,” he recalls. 

“But we remained persistent, driven by the imperative to safeguard our operations effectively.”

The innovative essence of Autoliv’s captive lies in its multifaceted approach to addressing insurance challenges. “We didn’t just seek to mitigate risk; we aimed to revolutionise our insurance ecosystem,” he says. This involved redefining relationships with insurers, enhancing communication with loss adjusters, and devising novel strategies to navigate regulatory complexities across jurisdictions.

Central to Autoliv’s captive innovation is its location. “We strategically based our captive in Utah, aligning with our significant operational presence in the region,” Rodert reveals. This localised approach facilitated constructive engagement with regulators and streamlined operational processes.

Autoliv’s captive provides a robust insurance mechanism and serves as a catalyst for broader risk management diversification. “We are committed to expanding the scope of our captive beyond recall insurance, encompassing various lines of business to fortify our risk portfolio,” says Rodert.

Reflecting on the journey, Rodert expresses gratitude for the collaborative efforts that propelled Autoliv’s captive initiative forward. “Our success wouldn’t have been possible without the unwavering support of our partners, including Aon and Zurich,” he acknowledges.

As Autoliv continues to pioneer innovation in automotive safety, its captive insurance journey serves as a testament to the transformative power of strategic risk management. Through perseverance, adaptability, and a relentless pursuit of excellence, Autoliv is reaffirming its commitment to driving safety forward, one innovation at a time.

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