We have extensive experience of working with clients looking to acquire run-off portfolios.
Typically, we will first assist the client with a pre-due diligence review. This will use publicly available information and possibly very high level information provided by the target company to assess the suitability of the proposition.
If an offer is made and is accepted then we can assist the client with a due diligence review. This is a thorough review of gross reserves at a detailed level and considering reinsurance recoveries and reinsurance security. It may consider the variability of reserves and could also include the equivalent of an ICA of the target company (i.e. a dynamic financial analysis of the company which considers thousands of simulations of the possible outcomes for the company) to assess the required capital of the new entity.
Historically, even quite recently, sophisticated models were not generally used. Now the regulator will insist on it.
This work typically has to be produced in a very tight timeframe. Our large and highly experienced team and our market leading actuarial software products ensure we can meet these challenges.
