Matrix provide bespoke technology performance insurance cover for Investors to de-risk and enhance the security of their investments – Q2/21

The challenge facing Private Equity houses and institutional lenders wanting to invest in new and cutting edge technologies is in establishing the necessary confidence in the production processes of the venture and substantiating the anticipated revenue streams to the benefit of all the stakeholders involved in the project.

From the entrepreneur’s perspective, the requirement is to effect an insurance cover for new technology risks associated with the manufacturing process so as to secure initial financing.

The solution to both these problems is a newly developed specialist financial insurance providing performance cover.

The insurance protects long-term investment with a guarantee of project output and quality.

This type of performance insurance can also be extended to cover the plant commissioning risks inherent in a new venture.

Performance Insurance – Operations

Key considerations include:

• Scope of cover – performance insurance is intended to cover the manufacturing process only. It is not intended to provide cover for the supply chain, lack of feedstock or lack of off-take.
• Cover basis – either Revenue or Loan (or debt) repayment.
• Policy term – this can be for the life of the funding structure or a shorter period. Currently cover can be provided up to ten years duration.

For the performance cover we develop an insurance structure with an attachment point or ”trigger” (Required Output) and policy limits (both on an annual and aggregate basis) to guarantee a minimum level of production adequate to generate enough cashflow to support the Project’s financing during the policy term.

Performance Insurance – Start-up repairs

Key considerations include:

• Scope of cover – the policy insures the plant commissioning risk. Cover is provided for related repair costs necessary to meet the Start-up Performance Test requirements.
• Policy term – up to a specified period from Mechanical Completion of the Project.
• Policy structure – we assess an appropriate deductible level and policy limit.

Insurers currently offer Start-up Repair cover as an add-on to Performance insurance not as a stand-alone cover option.

Matrix Capabilities and Experience

Matrix Global Services was founded in 2000 and is run by a team of highly experienced insurance and finance professionals, all of whom have extensive experience of designing, delivering and administering projects covering the whole spectrum of business types and sectors, from SME and mid-cap through to multi-territory international businesses.

With operations in the UK and the USA and the reach and ability to work with Clients around the world, Matrix has established itself as a “go-to” provider of bespoke insurance and financial structuring solutions.

Matrix provides its clients with the independent, totally transparent insurance, risk management and specialist technical support they require, providing each of them with a clear view and informed strategic assessment of the full range of the available options.

The expertise of the multidisciplinary Matrix team, allied to its in-depth knowledge of and strong, established, connections with the market for insurance and insurance services and the financial community, enables Matrix to provide a complete end-to-end service for the formulation and delivery of the solutions its Clients require; from programme conceptualization and design, through market presentation and negotiation, to implementation and the provision of ongoing administration and support.

” The challenge facing Private Equity houses and institutional lenders wanting to invest in new and cutting edge technologies is in establishing the necessary confidence in the production processes of the venture and substantiating the anticipated revenue streams to the benefit of all the stakeholders involved in the project. “

Get in Touch

Please Contact Us for more information on how Matrix assist investors in de-risking and enhancing the security of their investments, through the application of sophisticated insurance and risk solutions that adjust and reduce risk.