Marsh provides risk and insurance due diligence services to enhance and compliment accounting and legal due diligence. We evaluate the adequacy of the target’s risk and insurance programs and project post-close costs and synergies.
The need for accuracy and thoroughness is critical in the current environment, where increased pressure from investors requires a higher comfort level and investment certainty. Risk and insurance due diligence requires in-depth experience and disciplined analysis, and plays an increasingly important role in the overall due diligence process.
Marsh perform the following services:
- Identify the type and scope of existing risks and insurance needs of the target.
- Qualitatively and quantitatively assess the target’s risk profile, including benchmarking and reviewing financial security of current and historical insurance carriers.
- Develop pro-forma insurance cost projections with respect to the target’s total cost of risk (TCOR).
- Quantify historical liabilities (e.g. from self-insured programs) and identify any insurance-related one-off costs that may be incurred in the transaction.
- Identify areas of exposure or hidden liabilities (e.g. environmental) that may not have been optimally addressed by the target company and introduce potential solutions using insurance market capital.
- Identify unique characteristics of the transaction that may require custom solutions (e.g. representations and warranties, contingent liabilities, tax opinions).
- Evaluate the target company’s approach to risk management, loss control, and claims management.
- Highlight issues in the course of our due diligence reporting that may impact the pricing strategy or the sale and purchase agreement and work with the client's legal advisers to craft favorable insurance-policy language.
Throughout the transaction, a dedicated project management team works with our clients' bankers, accountants, and lawyers to deliver a due diligence report that is tailored to the project and uniquely details the target’s risk issues.