Insurance is often disconnected from the rest of your Balance Sheet & Treasury management..
Is your balance sheet efficiently managed? You are often taking much bigger uninsured risks. Don’t insure risks just because insurance is available. The future is not as unpredictable as you think.
Our full healthcheck will demonstrate better ways to holistically quantify and manage corporate risk on your balance sheet, thus reducing your overhead costs to be more competitive
Are your Insurance Claims actually Immaterial?
- In many client cases, insurance liabilities are usually immaterial to your total operations
- Current client example: insurance fund: £20m, total liabilities c£6,000m
- In other words, insurance claims are not material to their balance sheet
- Put another way, insurance claims are more predictable than they imagine
- This is also known as “Project Fear” (insurance for the unknown)
- By demonstrating that there are significant uninsurable risks which your operation takes on a day-to-day basis (eg falling sales), insurance can be placed in it’s proper P&L and balance sheet context ie, only insure if material to your P&L/balance sheet objectives
If you have an on-balance sheet insurance fund which is immaterial to your overall accounts, we can help you finance this risk in more efficient ways.
Do you offer Insurance to your Customers?
- In many client cases, insurance is offered to customers e.g. extended warranty etc
- These liabilities are usually financed by an off-shore captive (with/without fronting)
- The captive’s liabilities/profits are consolidated back onto the parent balance sheet
- This is a risk-taking exercise, no matter how dressed up
- In these cases, we also see very low XS liability/property/motor covers bought by the parent
- In other words, very limited risk taking, despite the greater predictability/investment return
If you offer insurance to your customers, not only can we optimise these for you (negotiating with any fronting insurers – we have extensive experience of mobile phone warranties, “free” insurance for car buyers and warranty/service plans for all white and brown goods), but we can also ensure that you have a complete holistic view of your overall insurable risk exposure.