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A $7.6 million event cancellation insurance payout due to the COVID-19 pandemic helped offset the Risk and Insurance Management Society Inc.’s loss of revenue in 2020.
The seven-figure payout, which covered both the cancellation of RIMS’ annual conference and exhibition and its NextGen conference, was revealed in its 2020 annual report.
It is not known which insurer or insurers paid out on the policy, but at the time RIMS’ broker was Aon PLC. RIMS did not immediately respond to a request for comment Monday.
Some $3.5 million of the payout had been received as of Dec. 31, 2020, while the balance was collected in January 2021, RIMS said in the annual report posted on its website this month.
Revenue generated from RIMS events dropped by $10.3 million in 2020 as the New York-based risk management organization was forced to cancel key events, according to the report.
Its 2020 annual conference had been scheduled to be held May 3-6 in Denver when it was canceled with less than two months to go. It was the first time in its history that RIMS had canceled the event.
The events and exhibitions team successfully unraveled contracts with more than 50 hotels, countless venues and hundreds of partners, RIMS said in the report.
The pandemic had “a material financial and operational effect” on RIMS in 2020, the report said.
To mitigate the pandemic’s effect on its finances, RIMS took various steps, including obtaining a $3 million working capital line of credit to act as a hedge as it waited for the insurance claim payout to fund operating costs. There were no drawdowns on the line in 2020, RIMS said.
Instead, RIMS liquidated some $3.5 million of its investment portfolio to help meet its operating cash demands. The organization also negotiated a rent deferral agreement on its head office in New York.
Various cost-cutting measures implemented in 2020, such as a hiring freeze and reductions in travel and discretionary expenses, “resulted in savings in 2020 and will result in savings for the foreseeable future,” RIMS said in the report.
In February 2021, RIMS secured a $1.3 million loan under the Paycheck Protection Program, a source of relief under the Coronavirus Aid, Relief, and Economic Security Act enacted in March 2020. The loan may be partially or fully forgiven if the organization keeps its employee counts and wages stable.
RIMS’ net assets increased by 8.5% to $12.6 million in 2020, up from $11.6 million in 2019, despite the disruptions it faced during the year.