Case Studies

Due diligence for buy-side M&A

We have been providing ongoing support to a large insurer for the due diligence process for proposed acquisitions. Our client engages us to perform an actuarial review of liabilities for acquisitions with very uncertain long-tailed books of business. The liabilities have typically had an emphasis on UK asbestos.

Each acquisition involves discussions with the actuarial team to gain an understanding for the type and nature of the liabilities and data available, before conducting an independent reserving exercise under various different scenarios. We replay back the results of our analyses to senior management, including what we feel are the key assumptions, sensitivities and uncertainties that need to be considered in the acquisition. The engagements typically have very short timescales with large strategic significance. Our approach is highly geared to focus technical analysis on the material elements of the liabilities that has a significant impact for the acquisition.

Through this process, we have internally developed a UK asbestos reserving framework.