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The simple truth is nothing causes panic quicker than being presented with figures that you can’t trust.

 

This is particularly true in challenging financial times and additionally relevant following on the heals of the “Popping of the Housing bubble.” We are going through a time when we are all paying closer attention to “The numbers” that companies are posting. We, as a whole, are additionally skeptical of the figures corporations are reporting, and are automatically “Shaving-off” a percentage of the “Good- news” while listening closely to an hint of a possible down-turn.

 

In this “New-World-Order, none of us want to get caught in the next “Bubble” or invest with the next Madoff. This has heightened our sense that “No News = Bad News.” When faced with a company that is seen as holding-back on information, more than ever we will assume the worst. As a result, a company that might be reluctant to admit small financial losses; concerned the information will lower their stock price, will instead be met by a weary public that fears the “Real-Numbers” are far worse.

 

Insurers’ providing inadequate financial reporting trying to down-play a 10% drop, could hurt them-selves more by stirring uncertainty about their financial condition; and stoke fear that they are the next AIG.

 

Rating companies, reinsurance companies, investors and the public at large, are smart enough to expect a company to face challenges, especially in difficult times. What is most important in creating confidence, is to convince the public that your figures are solid, real and that you understand, and are willing to do what it takes to return to profitability. If the market can’t trust the numbers your reporting, or there is a reporting vacuum, your company will the impact caused by the resulting panic.