Dulling the Pain of Collateral

A proactive collateral management strategy can drive efficiencies and produce significant economic benefits

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Aug 22, 2012, 10:00 ET

KANSAS CITY, Mo., Aug. 22, 2012 /PRNewswire/ -- The global economic slowdown has hit companies' balance sheets, and a new white paper from Lockton addresses ways to deal with the challenges of insurance collateral.

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Gary Shertenlieb, Jr., Lockton Senior Vice President in Risk Finance discusses the three key problems and alternative solutions in the paper, "Dulling the Pain of Collateral."

"The renewed focus on capital preservation has attracted greater internal scrutiny of collateral posted to support insurance programs," said Shertenlieb.

The three distinct but interconnected obstacles include:

Some insureds are dealing with changes in credit lines and borrowing/letter of credit rates.
Insurance carriers are underwriting their credit exposure to their insureds more stringently in the backdrop of the global economic slowdown.
Insurance carriers have been actively monitoring their credit concentrations to the banks and financial institutions that are providing collateral on behalf of their insureds.

"Alternative collateral strategies can make a significant impact on the efficiencies and cost-effectiveness of a complex insurance program. By understanding that the insurance placement is truly a utilization of capital, we work with our clients to deliver creative, value-added solutions in challenging economic times," said Shertenlieb.

Shertenlieb's full commentary is available free from Lockton here.

About Lockton

More than 4,450 professionals at Lockton provide more than 15,000 clients around the world with insurance, benefits, and risk management services that improve our clients' businesses. From its founding in 1966 in Kansas City, Missouri, Lockton has attracted entrepreneurial professionals who have driven its growth to become the largest privately held insurance broker in the world and 9th largest overall. Independent researcher Greenwich Associates awarded Lockton its 2011 Service Excellence Award for risk management for large companies. For three consecutive years, Business Insurance has recognized Lockton as a "Best Place to Work in Insurance." To see the latest insights from Lockton's experts, check Lockton Market Update.

SOURCE Lockton