INSURANCE VALUATION, ALLOCATION & RECOVERY ANALYSIS
One of the important assets that a company maintains is its insurance policies and one of its potential liabilities is the threat of a mass tort or environmental exposure. Many mass-tort claimants have been exposed to allegedly hazardous products or pollutants for decades. With hundreds of thousands of workers and bystanders exposed, corporations and their counsel look to experts to assist them with the complexities of determining how to allocate individual claim losses to the appropriate insurance coverage available. ARPC professionals have significant experience with matters involving the collection of insurance, and analysis and modeling of complex insurance relationships.
Appropriate allocation and trigger methods are frequently litigated and are, often, the core of disputes between companies and their insurance carriers. Choosing to allocate losses to insurance coverage using a “bath tub approach”, collapsible coverage block or pro-rata approach are a few choices that companies have and these choices can result in a significant financial impact on the company’s future cash flow. Selecting a trigger or determining what law governs your trigger options (continuous, exposure, installation, and so on) may also have a significant impact on the future cash flow and insurance recoveries. ARPC consultants have assisted in insurance allocation of large, complex insurance coverage blocks in litigation matters, settlement discussions, insurance reserving matters and bankruptcy trusts. Our modeling alerts clients to the financial impact of certain choices about triggers and allocations. We have experience in designing and developing computerized allocation systems that our clients can use in-house, and in providing allocation services to support complex disputes. We combine our extensive valuation skills and understanding of the underlying claims to assist our clients with the best choices possible for insurance analysis, allocation and recovery.
A thorough review of all available insurance policies, coverage settlements and potential long-tail claim threats prior to acquiring an entity or completing a merger is often required. The accessing and reviewing of insurance information can be tedious due to complex acquisition histories. It can be, further, complicated by various agreements regarding the transfer of assets and liabilities. ARPC consultants specialize in providing due diligence analysis to companies regarding the economic impact of insurance and claim issues.
Our experts have assisted corporate defendants, bankruptcy trusts and insurance and reinsurance carriers with numerous services including but not limited to the following:
- Allocation, valuation and recovery analysis
- Forecasting and cash flow modeling
- Due diligence in mergers & acquisitions
- Financial-statement reporting requirements
- Settlement discussions between companies and insurance carriers
- Valuation of insurance assets available to bankruptcy trusts
- Insurance and reinsurance company reserving needs
- Valuations of complex and non-standard insurance assets
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