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.
Trade Credit Insurance protects business income. It is ideal for both domestic and export businesses selling goods or services on credit terms to another business. Protection can be arranged for insolvency of a buyer, protracted default, contract repudiation, protracted default, voidable preference payment claims and more.
While it is primarily designed to protect a business selling on credit terms against non - payment by one of its debtors resulting in a bad debt loss, Trade Credit Insurance also brings a number of other benefits to a business.
Most business plans and concerns are based around sales, credit management and finance. Trade credit Insurance assists in all of these areas.
Credit management – strengthens processes and procedures, allows for reduction of bad debt provisioning, provides ability to offer more competitive terms to customers, offers a financial insight into a prospective customer while monitoring existing customers. Utilisation of the credit insurers collection facilities.
Sales - Growing sales and attracting new customers, selling into new countries, retaining more customers. It reduces the barrier to a sale and provides a competitive advantage to the seller by allowing open account trading and therefore reducing the need for Letters of Credit or cash payments while retaining margin.
Most businesses offering credit terms require bank borrowing to assist with cash flow. Trade Credit assists in obtaining trade finance/invoice finance from a banking partner and can help increase the amount able to be borrowed, reduce interest rates or can reduce other security requirements.
Marsh’s Credit Specialties team can provide a complete solution for your Trade Credit needs providing specialist advice, structuring solutions, researching market capacity and arranging Trade Credit policies. They also provide current industry and market advice and developments.
ACC and Wellbeing Support Services
The impact of COVID-19 on many New Zealand businesses has been extensive, with some businesses having to completely review or change their operating environment.
Marsh in New Zealand is able to support employers with managing risk to their people. Through our subsidiary company Wellnz Limited assistance can be provided in reducing workplace injuries and illness, and managing any incidents that occur.
Through our network we can provide access to online occupational specialists and mental health specialists for employers and their employees. Wellnz can provide options for large employers that have seen ACC costs reduced by over 50% and can look at options to reduce your ACC and absenteeism costs. As an essential service, through this pandemic MMC and Wellnz are fully operational with all staff available to provide services in New Zealand.
In light of the 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.
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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