Mergers & Acquisitions
We have experience of assisting both buyers and sellers in a number of different markets, including Lloyd’s and the London Market, UK Company market, Europe and Bermuda. Consequently, we have broad market knowledge of the current issues to be considered as part of any due non-life insurance diligence process.
The actuarial due diligence process will often be constrained by the availability of key information. We are very familiar with adapting our approach to accommodate data issues and explaining the key areas of uncertainty. The value of such due diligence is that, for example, it can provide independent views on the adequacy of the target’s booked reserves, which can be a very important factor in many general insurance transactions.
At any point in the insurance cycle, actuarial analysis of profitability trends is essential to ensure that the buyer only pays for a sustainable level of profit. An appraisal valuation highlights key areas of profitability and provides insight into which parts of the company will generate value and which may actually erode value.
Actuarial M&A Services
The assistance we can provide to clients varies from providing high level peer-review comments on reserving and underwriting to carrying out a full due diligence. For example, we can provide senior actuarial staff to attend meetings with representatives of a target company during the fact finding stages of a potential investment opportunity.
Should a full due diligence be required then the services we can provide comprise two elements:
- Actuarial due diligence – normally this would involve assessing the outstanding claims liabilities (including IBNR adequacy), including possibly providing independent estimates.
- Valuation of goodwill – we would carry out a market-based actuarial assessment of the non-life business (known as an “appraisal valuation”). The purpose of this is to help the client understand the potential value of the non-life business of the possible sale or purchase , and the key drivers of this value.
These services are equally relevant when carrying out due diligence on behalf of either a buyer in respect of a particular target, or for a vendor when preparing for a possible sale.
We often work alongside other M&A specialists from Deloitte, including tax, corporate finance, audit and consulting, to provide a fully integrated service to clients.