M&A Insurance Due Diligence: The benefits of a Non-Broker approach – Q2/21

As an Independent Insurance and Financial Advisory, Matrix is not an insurance broker and so does not handle or transact Insurance, this enables us to conduct Insurance Due Diligence with complete discretion and produce an IDD report which provides an unbiased, truly impartial view of the suitability of an existing insurance programme.

This independence also allows us to focus solely on designing and recommending best-in-class insurance solutions, unencumbered by broker expectations, commission agreements, or internal conflicts and competition.

Matrix provides an independent Insurance Due Diligence solution for investments worldwide that delivers a comprehensive, technical review, providing consistency in this critically important area of transactional due diligence.

Our highly experienced in-house specialists draw upon and employ the widest range of support and advice from our extensive market connections and detailed knowledge of a company’s sector to deliver a bespoke Insurance Due Diligence project for each transaction.

How we do it

Matrix follows 6 key steps to ensure we deliver the independent perspective our M&A clients require to enhance the transaction process, aid deal negotiation and identify value-added opportunities, whilst simultaneously highlighting the key areas of concern ahead of the transaction.

Step 1 – UNDERSTAND

• The Target / Company’s Business and Risk Profile
• Its operations, products / services and territories
• Current insurance purchasing strategy and aims

Step 2 – ASSESS

• Key Risks exposures including; operational, supply chain, environmental, contractual and statutory risks
• Quality of existing insurance and risk management relationships and the total cost of risk of the current insurance programme

Step 3 – REVIEW

• Existing insurance programme and structure including; key exclusions, conditions and warranties
• Existence of legacy cover
• Current and historical loss history and analysis of any potential trends
• Impact of change of control

Step 4 – MAP

• Key risks against the existing insurance programme, highlighting uninsured and under-insured risks
• Existing insurance programme against best-in-class / industry standard

Step 5 – REPORT

• Issue an IDD report providing an independent comprehensive technical review of the existing insurance programme and the impact of the transaction
• Opinion on the adequacy of the existing insurance programme benchmarked against industry standards
• Identification of additional potential insurance solutions
• Recommendations for improvements / solutions to identified gaps/ inadequacies, potential cost implications and necessity for additional coverage, with priority grading for key risks
• Action plan for key pre- and post-completion actions

Step 6 – IMPLEMENT

• Follow up
• Project Management assistance with Warranty & Indemnity (W&I) placement, KeyPerson insurance, transition of insurance programme coverages and/or potential broker changes

Who are our Clients

Matrix partners with a wide selection of the world’s leading Private Equity houses and M&A advisors. We work for Private Equity houses on the buy-side, as well as preparing companies for divestment and acting for the sell-side. We also provide our IDD services direct to corporate clients and provide additional insurance project solutions for clients across a variety of sectors and territories.

Matrix Capabilities and Experience

Matrix are a specialist independent insurance and financial consultancy. For over 20 years we have been delivering successful projects for our Clients across a broad spectrum of industry, commercial and financial sectors on both a national and global basis.

The Matrix insurance team members have previously worked for several of the major insurance brokers and have considerable experience in developing, implementing and managing corporate insurance programmes.

Other team members are experts in a variety of financial disciplines which has enabled Matrix to expand our scope of services to include innovative financial and insurance structuring solutions for businesses, financial institutions and the global M&A community.

We have specifically positioned Matrix so that we do not actually handle or transact business as a broker or Insurer. Consequently, we can provide a wholly independent viewpoint for our Clients without being impacted by the vested interests that are normally involved in insurance market transactions.

Because of our unique positioning, we can negotiate with existing suppliers and alternatives alike, selecting the most appropriate approach depending on the specific requirements of individual projects.

We focus on insurance 24/7 which has given us an in-depth perspective of the capabilities and resources of the broker and Insurer community. Our extensive project work also provides us with an ongoing insight to current market developments and the implications for our Clients.

Matrix are fully authorised and regulated by the Financial Conduct Authority.

” As an Independent Insurance and Financial Advisory, Matrix is not an insurance broker and so does not handle or transact Insurance, this enables us to conduct Insurance Due Diligence with complete discretion and produce an IDD report which provides an unbiased, truly impartial view of the suitability of an existing insurance programme. “

Get in Touch

Please Contact Us for more information on how Matrix assist the world’s leading Private Equity houses and M&A advisors to optimise and enhance the value of their M&A transactions.