Crawford & Company on how to prevent disaster turing into a cashflow crisis
The need to maintain cashflow after a big event is an aspect of disaster planning that is easily overlooked, the Airmic annual conference heard today.
“In the early days of these big events there’s going to be a big outpouring of cash with nothing much flowing back in,” Clive Nicholls, vice president, global markets at Crawford & Company told a workshop.
"There is inevitably a time lag between the initial expenditure and getting compensation from your insurance company. In times when credit is tight, finance directors will demand to see the gap reduced to the minimum," he said. "The only way to make this happen is to plan in advance."
Nicholls highlighted a number of actions that risk managers can take to ensure a good cashflow outcome. These include checking that your insurance policy provides clarity and certainty, knowing the information that claims managers will require and putting in place the necessary recording and monitoring systems to ensure that they receive it in a timely fashion.
“If you think through these issues before anything goes wrong, then it will facilitate payments and save you time. It will also reduce the likelihood of confusion with your insurers, which are the last thing you need when there has been a big event,” he said.
“Having a team where each member understands what is required will make it easier. For the risk manager this could be a once-in-a-lifetime occurrence so you have to get it right first time.”
Hosted by comedian and actor Tom Allen, 34 Gold, 23 Silver and 22 Bronze awards were handed out across an amazing 34 categories recognising brilliance and innovation right across the breadth of UK general insurance.
