When Herc Rentals spun off from The Hertz Corporation in July 2016, many aspects of the organization’s finance and treasury function had to be rebuilt from scratch. “None of the treasury staff or management team transitioned to Herc,” explains Mustally Hussain, vice president and treasurer of Herc Rentals.

The new business was sizable, with US$1.6 billion in annual revenue and around 4,800 employees, but it was much smaller than its former parent. Managers soon found that many processes which had worked well for the former parent were no longer meeting the needs of the newly independent company. In risk management, this disconnect was particularly noticeable.

“When we first spun off, everything we did was the exact same process that Hertz used,” says Toni Boswell, senior director of risk and insurance for Herc Rentals. “But because the company was so dramatically different in size, not everything that we mirrored worked for us. One example was our accruals for casualty insurance. This is among our largest risks, and we were concerned that our internal reserves did not accurately reflect our true liability.”

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Meg Waters

Meg Waters is the editor in chief of Treasury & Risk. She is the former editor in chief of BPM Magazine and the former managing editor of Business Finance.

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