For the last year, insurance governance experts Mactavish held in-depth consultations with 140 manufacturing businesses across Britain and draws attention to the continued risks and systemic failings, which could hinder the sectors recovery.
Released on the same day the Law Commission publishes its final Consultation Paper on the first major shake-up of corporate insurance in the last 100 years, Mactavish’s report provides the backbone of the Law Commission’s proposals.
The report singles out the fundamental oversights and blind spots that could see individual manufacturers failing due to not paying, or delaying paying, an insurance claim longer than a company’s ability to sustain its business. Attention is drawn to the fact that it would only take one or two high-profile failings for confidence in the sector to fall dramatically and damage the recovery currently being sought.
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The report warns that:
"Most manufacturing businesses today remain needlessly exposed by addressable weaknesses in the insurance system, but usually do not find out until it is too late. The current economic climate has exacerbated many of the contributing factors...Far more questions need to be asked by both insurance buyers in the sector and those responsible for risk at board level.”
CEO of Mactavish, Bruce Hepburn, advises:
“The whole mechanism of corporate governance today neglects to recognise insurance failure as a large and increasing threat, with manufacturers facing especially dire concerns as a result of its high rate of adaption to current economic reality.”
“Legal reform is overdue, and the reliability of insurance providers in responding to major events is in sharp decline. But the law alone will not solve the problem – companies need to do a lot more to play their part and the thrust of reform is that company practices need a total rethink.”
Law Commissioner, David Hertzell, concludes:
“The Mactavish reports are a very powerful description of the problems in today’s insurance market. Policyholders, brokers and insurers all appear at time to ignore best practice. In our view this evidence highlights the need for clear up-to-date law to establish the parties’ responsibilities.”
For a copy of the report, please contact Richard Matthews (Mactavish) on: 0207 463 2252, mobile: 07816 049371 or email: richardmatthews@mactavishgroup.com
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