The strategic treasurer. The risk manager for the company. Where better for the treasurer to get out of the traditional disciplines of simply managing liquidity and bank accounts, than in managing insurance? Risk management meets budget and operational constraints, and it is a very financial discipline.
This call was initiated by a member who is struggling with increasing premiums as the market hardens, and wanted to know whether other treasurers who are responsible for insurance are taking the same measures, i.e., reducing the purchase of cover and increasing deductibles. The quick answer to that question is yes, in response to significant premium increases, many members are taking another look at the levels of cover. The other question was whether there are additional, more creative ideas.
This triggered a wide ranging discussion:
Should insurance be in treasury? The consensus – not surprisingly – was yes, but responsibility often lies with, or is shared with, legal and HR.
How useful are captives? One member finds them useful to accelerate the tax deduction for losses. Others find them useful for centralising risk and losses away from the operating units – this can depend on the company’s management system. Others are wary of the cost and complexity of a captive.
Should you use brokers? If so, how effective are RFPs between brokers? One member made savings by changing brokers following an RFP. One member does some negotiating directly with the insurers – but this can be heavy lifting....please sign in to continue reading
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