Relevant Risk: Strategic
A food manufacturing business was being divested from a large multi-national and needed support to understand the different risk profile of the new entity, and to place an insurance program for the new entity.
The nature of construction presented a difficult risk to insure in the market. Exiting a global insurance program meant that diseconomies of scale were present for the insurance program. The support provided by a global business meant that the business was more exposed to any kind of interruption to production operations.
The organisational wide risk review allowed management of the new entity to focus on the key risks of the redefined business. In doing so it allowed key risks to be identified and action plans implemented to address. An effective marketing campaign to the insurance market, highlighting the proactive action taken towards risk management ensured a better insurance outcome.
Management of the new entity had a clear understanding of the key exposures to the business, which allowed them to allocate resources accordingly. The proactive marketing campaign led to an insurance saving in year one of $200,000 and projected saving over three years of $500,000 with the implementation of risk management initiatives.