Our advisory services span the entire risk continuum: Operational & Business Risks, Risk Management, Transactional Risks, and Claims & Litigation.
We guide our clients at each stage of risk.
Operational & Business Risks
Collateral
Reducing Surety Bond Collateral Requirements by Over $130MM
The Scenario:
PE Target with $148MM in outstanding surety bonds, secured solely by the Parent Seller’s balance sheet, was faced with the potential of posting Letters of Credit to secure the new $148MM bond line at close, which was not contemplated within the post-close financial models or revolver capacity.
Our Solution:
We sourced an alternative brokerage partner, created a consortium of surety underwriters, and highlighted the impact of collateral on the relevant pro forma financials and debt/equity structures to reduce the collateral requirement by 90% at close and ultimately eliminate the requirement at renewal.
Procurement
Global Infrastructure Fund Seeking Portfolio Leverage
The Scenario:
Global infrastructure fund seeking risk and insurance procurement leverage for airport, power, highway, rail station, port, pipeline and other energy assets.
Our Solution:
We worked with each asset to analyze the concentration of spend by insurer, broker and other intermediaries. Our team discovered fragmented relationships, excessive fees and premiums, duplication and gaps in coverage and a need for higher coverage limits. We facilitated the creation of a portal to access a panel of global insurers which achieved centralized buying power, consistent claims handling and saved on average 24% premium reductions for each asset joining the program.
Contract Review
Leveraging Claims Expertise to Achieve $10MM Purchase Price Reduction
The Scenario:
Distressed-Debt Lender acquiring steel manufacturing assets out of receivership relying on Seller’s representation of an expected large claim recovery in excess of $10MM as basis for valuation in its bid.
Our Solution:
We analyzed policy contracts, broker letters, insurers’ claims and position letters and determined that the cause of loss was excluded from coverage, therefore no recovery would be available from insurers. Our assessment enabled the Buyer to negotiate a $10MM purchase price adjustment to address the non-recovery.
Captives
Captive Relevancy Analysis
The Scenario:
Investor questioning captive insurance company’s relevancy in context of its diligence of a Target’s risk program.
Our Solution:
We guided discussions focused on captive valuation in purchase price consideration, maximizing captives’ impact, cash and surplus repatriation, wind down and ownership transfers.
ERM
Understanding and Addressing Organizational Risk
The Scenario:
Multinational privately held company seeking independent guidance to set enterprise-wide risk and insurance protocols.
Our Solution:
We created and led a risk team comprised of internal and external finance, legal, insurance, IT and human resource professionals to develop and implement a risk map and enterprise risk management processes.
Surety
Gaining Access to Surety Facility in Face of Project Shut-Down
The Scenario:
Global real estate asset manager seeking assistance in gaining access to additional surety bond capacity to facilitate the commencement of a new project.
Our Solution:
We leveraged its unique consortium of global surety panel underwriters and specialty brokerage relationships to highlight their project metrics, capitalization, pro forma financials and security package. Our presentation provided the asset manager with a surety bond facility in excess of $75MM to enable the project to proceed.
Program Structuring
Strategic Review of Risk Assumption vs. Transfer
The Scenario:
Shipping and port operator seeking assistance to evaluate more efficient alternatives against its historical practice of self-insuring USL&H and Workers’ Compensation risks.
Our Solution:
We conducted a comprehensive review of historic loss data, loss stratification at different retention levels, frictional cost, collateral required and necessary additional resources. We counseled the management team and Board to achieve the acceptable risk retention level and insurance attachment point. Further, new protocols were established to address legacy claims and future liabilities.
Risk Management
Loss Control
Improving Risk Profile and Cost of Risk through Operational Efficiency & Loss Control
The Scenario:
Transportation and logistics company with a fleet of over 5,000 vehicles, multiple acquired divisions, separate management teams, varied legacy insurers and claims administrators, and competing safety/loss control and claims strategies, interested in streamlining its business efforts to reduce cost and increase efficiency.
Our Solution:
We launched a project focused on loss striation, self-administration of claims, aggressive claims closure and implementation of future loss control and safety measures. The project achieved 84% claims closures within the first 18 months, total cost of risk reduction of 35% and developed a culture of safety and loss sensitivity.
Certificates
Contract & Certificate Risk Management Achieves 100% Compliance & Avoids Future Uncovered Losses
The Scenario:
Top 5 publicly traded home builder seeking solution to its manual tracking of indemnification obligations, non-compliance with vendor contracts and excel management of 5,000+ certificates of contractors, sub-contractors and trades. The administrative burden caused losses that otherwise would have been covered by sub-contractors/trades.
Our Solution:
We evaluated the process and engaged a vendor compliance firm to create a bespoke online system to collect all vendor agreements, ICE affidavits, credit reporting metrics and needed insurance data for all contractors and subs. 100% compliance was achieved in 3 months, mitigating future uncovered loss costs.
Outsourced RM
Outsourced Risk Management Reduces Cost and Avoids Internal Risk Obsolescence
The Scenario:
Acquisitive bedding manufacturer with limited capabilities to build robust risk management team, in need of additional safety, loss control and claims resources.
Our Solution:
We serve as dedicated Risk Manager on an annual basis. Our role includes all aspects of corporate risk oversight to best position our clients in front of insurance capital markets and interface with co-divisions (i.e. finance, legal, logistics, sales, environmental health & safety, human resources, claims, and IT).
Benchmarking
Using Proprietary Data to Mark Risks Against Peers
The Scenario:
Privately held company experiencing a change of risk seeking independent guidance on appropriately level limit, deductible, premiums given inconsistent benchmarking from a variety of brokers.
Our Solution:
Our independence, market access and domain expertise provided the management team with unbiased recommendations on the best level of risk retention versus risk transfer against the balance sheet of the company.
Audits
Comprehensive Audit Leads to $10MM Savings
The Scenario:
Multinational asset manager, with disjointed insurance procurement processes, facing enormous growth in insurance spend and loss cost globally, with its 27 portfolio assets.
Our Solution:
We identified scope of work for each portfolio company, implemented Gantt process management, audit review protocols, interacted with individual management teams and respective brokers and TPAs and provided a comprehensive report citing analytics and specific recommendations in an extremely compressed timeframe. The audit and implementation of our findings yielded over $10MM in savings in year 1 and the ability to achieve future consistency in risk & claims oversight.
RFPs
Driving Savings and Transparency through RFP
The Scenario:
Large energy company seeking independent advisor to assist with a broker tender process based and conducted out of London.
Our Solution:
We identified broker participants based on sector expertise and aligned footprint to client exposure. Our team crafted the RFP document, tailored to address unique business and risk management needs, analyzed all written broker proposals, conducted in-person interviews and provided grading evaluation to the client. Process resulted in savings of over GBP 1MM, including a reduction of 25% in aggregate broker remuneration and secondary income.
RM Staffing
Staffing Analysis for Healthcare Services
The Scenario:
Healthcare services company seeking independent assistance in evaluating alternative staffing costs in excess of $5MM+.
Our Solution:
We analyzed various alternative options to outsource personnel and claims functions, identified material cost savings to close out legacy claims and streamline go-forward insurance and risk programs. We also assisted in the placement of an internal risk manager.
Transactional Risks
Due Diligence
Securing a Decisive Bidding Advantage
The Scenario:
Financial sponsor targeted a global sports equipment manufacturer with challenging product liability exposures and legacy claims. Target’s insurance program was short-term and both the sponsor and prospective financing parties were seeking 7-year certainty of insurance coverage and limits.
Our Solution:
We identified a long-term carrier partner and hosted confidential principal-to-principal negotiations by which a specialized multi-year product liability contract was agreed. As no other bidder was able to achieve a multi-year solution, the insurance contract proved to be the decisive factor in the winning bid.
Bankruptcy
Structuring and Placing Complex Risk in the 4th and 9th Largest Bankruptcies in US History
The Scenario:
President’s Task Force on the Automotive Industry was seeking an independent advisor to work through variety of risk, collateral, surety, insurance and self-insurance elements, which included pre-, post-, and liquidating trust liabilities in its restructuring efforts.
Our Solution:
We manuscripted global D&O, Pension/ERISA, Crime, and Employment Practices policies, conducted an analysis of self-insured Workers’ Compensation in 47 states, restructured the security and collateral package of the respective insurance and surety programs and achieved material expense reductions. We also served as the risk manager to the liquidating trust during the wind down period.
Risk Transfer
Transferring Catastrophic Fund Risk in 24-Hour Timeline
The Scenario:
A PE firm in the midst of a take-private acquisition agreed to a $350MM break-up indemnity to the representative investment banks, placing entire fund performance at risk.
Our Solution:
Within a 24-hour pre-closing deadline, we crafted language to backstop the substantial indemnity obligation and obtained agreement from carrier partners, at a minimal cost of $50K, enabling the consummation of the transaction.
Reps & Warranties
Transferring Asymmetric Indemnity Risk in the Insurance Capital Markets
The Scenario:
Syndicate of VC Firms in sale of an Israeli-based data compression service provider seeking to backstop indemnities that heavily favored buyer
Our Solution:
We structured and secured a customized, 6-year, multi-tiered insurance contract with limits above $100MM. Our team advised on strategies to fully transfer risk of breach, heavily amended contracts to address complex IP reps and secured a higher purchase price as a result.
IPOs
Independent IPO Oversight Eases Board Concerns
The Scenario:
Board of Directors of an E-commerce platform with VC backing requested independent oversight of its evaluation of Directors & Officers insurance pre- and post-IPO.
Our Solution:
We guided the process, given an inexperienced broker with little market access and leverage. We introduced a number of foreign insurers resulting in more competitive results, better market visibility and manuscript policy protection.
Refinance
Distressed Company Facing Insurance Non-Renewal
The Scenario:
International drilling and mining conglomerate, facing non-renewal of its D&O coverage, due to financial restructuring and recapitalization, with threats of Board member resignations.
Our Solution:
We identified an alternative broker and crafted a new program solution to rescind the carriers’ non-renewal, and remove the coverage challenges. The new program resulted in alleviating the concerns of the Board of Directors and secured a pre-paid run-off/tail protection to ring-fence liabilities; adding protection for individual directors only (without access by the corporate entity). Savings of $3MM achieved.
Tax Indemnity
Addressing Potential Foreign Tax Liabilities for Hedge Fund Clients
The Scenario:
Hedge fund facing potential past and future foreign tax liabilities seeking ability to avoid negative impact on future fund returns and potential regulatory penalties.
Our Solution:
We designed and structured viable risk transfer solution with $50MM limits, for reasonable risk transfer price, alleviating reputational risk and future exposures.
Claims & Litigation
Forensic Claims Analysis
Claims Settlement Negotiations for Client Not Paid in 2 years
The Scenario:
Portfolio asset suffered a catastrophic loss due to collapse of a recently constructed South American hydroelectric tunnel. Due to disputes on reconstruction terms and policy discrepancies no payment had been made by the insurers in 2 years. Neither the global broker, nor additional claim resources engaged out of London, were able to secure an advance or any affirmative position on coverage. In the interim, the investor issued an additional capital call to fully fund the reconstruction of the tunnel.
Our Solution:
We conducted a claims and policy analysis, determined a clear path to coverage, facilitated principal-to-principal meetings with the senior executives of the insurer and sponsor, and achieved a recovery of $115MM within 3 months.
Claims Advocacy
Overcoming Significant Litigation and Settlement Uncertainty to Close Global Merger
The Scenario:
Multinational public trading firm in the midst of a merger being hindered by pending shareholder actions, seeking to ring-fence potential liabilities in advance of closing.
Our Solution:
Insurers initially offered minimal settlement contribution. We led negotiations to achieve claims contribution of $8MM+ (four-fold above initial offer), clearing path to merger closing without litigation overhang.
Crisis Management
Crisis Management for Client Accident Following High Profile IPO filing
The Scenario:
High profile automotive and technology firm facing reputational crisis resulting from an employee-owned private plane crash with other employees on board. The event caused significant damage on the ground and interrupted power to a large portion of the area. Despite a firm and clear company policy against the use of personal aircraft, there was no corporate insurance in effect.
Our Solution:
We engaged as part of crisis management team to address every aspect of claims, forensic property damage and community impact. We crafted new Corporate Air Travel policy, internal procedures, and needed Aviation insurance.
Litigation Buyout
“Bet the Company” Litigation Capped to Ease Closing of Transaction
The Scenario:
Investment firm positions a portfolio healthcare LTAC business for sale, with material, uncapped potential liability arising from pending litigation alleging trade secret, misappropriation of corporate assets and conspiracy. PE firm was unable to distribute proceeds from its sale due to litigation overhang. Underlying insurance coverage also in dispute given discovery.
Our Solution:
We led forensic analysis team to review and achieve revision on coverage position, obtaining $600MM in additional limits to be available to cap future liability, in the event of negative judgment against the Company and the PE firm.
Engagements
We are fee-based, whether engaged for project specific needs or annual advisory oversight. Our fees are determined by timeframe, resources and expense required, scope complexity and deliverables.