As organisations navigate through a pandemic, the material change to their operations and risk profile could entitle them to certain cost saving opportunities. The following are examples of potential ways to achieve savings across your business during the corresponding pandemic lifecycle stage.
Companies that face revenue changes may qualify for rebates on their insurance. This is particularly apparent with business interruption insurances. Our Forensic Accounting team can conduct a Declared Values Review for businesses in light of changing revenue forecasts, which can help identify whether a premium rebate is qualified.
There is also an opportunity to update insurers on revenue changes to identify rebates in other insurances, such as liability. These rebates can unlock cash flow to businesses quickly that can be invested elsewhere.
Claim insured losses
There is an opportunity to obtain immediate cash flow savings through either:
- Closing out and settling outstanding claims; or
- Identifying any recent losses from forced closures by government bodies and then preparing the claim. The Marsh Claims Solutions team can help quantify the losses and then advocate on a client’s behalf to maximise recoveries and expedite settlement.
The management of large losses following a disruptive event or dispute can be extremely complex. Marsh Claims Solutions can provide comprehensive support to guide you through the key aspects of post event management. This support can include:
- Loss quantification and claim preparation — swift assistance to help secure cash flow, assist mitigation strategies, quantify losses, as well as present and settle insurance claims.
- Claims project management and claims engineering — assistance with the claims process to enable you to concentrate on ongoing business matters while helping you to maximise a fair and reasonable recovery.
- Fidelity and liability claims support — assistance with preserving and recovering evidence and interviewing employees to measure economic damages, helping to increase the likelihood of a full insurance recovery while minimising investigative costs.
- Dispute advisory — assistance with dispute resolution, expert witness testimony, and litigation support throughout the dispute resolution process to help you resolve issues in an expeditious and cost-effective manner.
- Uninsured loss recovery — assistance in pursuit of recovery rights against responsible third parties for uninsured property, financial and marine claims.
Reduce insurance premiums
With competing cash flow pressures, it’s important to re-evaluate if your business can take more risk on and therefore reduce insurance premiums. The first part of this is to:
- Work with your broker to identify what is the business’ risk bearing capacity, i.e how much financial impact can a company withstand without significantly impacting its operations; and
- Understand what business’ strategic appetite is to take on more risk. Marsh Risk Analytics can model the losses that the business is exposed to and then conduct Risk Finance Optimisation (RFO). A RFO mathematically determines what are the company’s ideal deductibles and limits that will result in the most cost effective outcome.
In addition to the above, companies have also faced significant changes within their workplace. With more employees working offsite their risk profile has changed and through redesigning the worker compensation program they may be able to capitalise on reduced insurance premiums and rebates.
Surety bonds are one way to help you improve cash flow and reduce your utilisation of bank facilities.
Other than the issuer, surety bonds are identical to bank guarantees: they are unconditional, on-demand, and irrevocable.
Our Credit Specialties team works with businesses that have traditionally used bank guarantees, and replace these with surety bonds as a cost effective alternative in meeting a company’s financial assurance needs while diversifying their capital sources and releasing debt capacity within existing banking facilities.
Over the past 24 months, new and expanded uses for surety bonds have been developed, including committed facilities, securing workers’ compensation liabilities and mine-site rehabilitation. If required, surety bonds can also be paired with bank guarantees to meet specific business needs.
Marsh’s Credit Specialties team can provide a complete solution for your guarantee needs, from arranging guarantee facilities and securing adequate capacity, to providing advice on bond wordings and indemnity negotiation.
Workers compensation adjustments management
The impact of COVID-19 on many Australian businesses have been extensive, with some businesses having to completely review or change their operating environment.
Where you have had to make business changes or reduce employee numbers as a result of a material change to your predominant business activity, the Mercer Marsh Benefits (MMB) team can support you.
MMB is a collaboration between Marsh and Mercer Consulting. Together, we represent one of the largest employee benefit consultancy and brokerage businesses in Australia, with a combined experience of more than 50 years in employee benefits brokerage, consulting, and HR outsourcing businesses.
MMB can work with your workers’ compensation insurance provider to review your particular circumstances and explore mid-term adjustment options to help increase your cash flow when you need it.
For more information, or to arrange a conversation with the MMB team, please contact your broker.
In light of COVID-19’s impact on the economic environment, we expect many of our clients’ businesses to be impacted due to a downturn in trade.More than ever, these are the times insurance programs and adequate coverage levels protect our clients and their businesses. Insurance is a cost which can be significantly managed through premium funding.
Premium Funding is a tool which helps businesses to manage their cash flow and preserve working capital. Marsh offers clients a premium funding solution for insurance premium costs.
If you would like to spread out the cost of your insurance premium payments and preserve your working capital, please speak to your broker who can arrange a conversation with a member of our Premium Finance team.
Following a pandemic, the financial value and cost to reinstate buildings is likely to have changed. This can have a material impact on financial reporting valuations and sums insured. As a result, companies can be over-insured, paying too much insurance premium or incorrectly stating the value of their buildings in financial reports. The Marsh Valuations team can conduct these valuations and provide the accurate financial reporting and insurance valuation.
We are here for you
As COVID-19 continues to affect how we all do business and interact with one another, we are committed to continue to deliver timely and relevant information to our clients and broader community. If you have any questions or would like to have a conversation about the impact coronavirus is having on your business, please reach out to your Marsh representative, or email us here.
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